Overstock.com CEO Fears Corporate Tax Hikes Are on the Way

This is a rush transcript from "Your World With Neil Cavuto," December 1, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: White House economic adviser Larry Summers has a very funny way of wooing corporate execs just before a job summit. Summers just telling a group of them last night — and I quote — "If you look at taxes paid by corporations as a fraction of profits, they're actually very, very low."

Too low?

Well, Overstock.com CEO Patrick Byrne concerned that means they won't stay that low for long.

Patrick, good to have you. What do you make of this comment?

PATRICK BYRNE, CHAIRMAN & CEO, OVERSTOCK.COM: Well, that is code. That is Washington code. That's a trial balloon for, get ready. We are going to — we are going to propose raising corporate taxes.

CAVUTO: In that same speech, Pat, what was kind of interesting is, he talked about the greater good that corporations can do, besides just good for their shareholders.

What do you make of that?

BYRNE: Well, I — I — I think that Larry Summers is completely betraying his whole academic history, his — his — you know, Adam Smith said, I have never known much good to be done by those who effect a trade for the public good. I tried to trade for the public good, but trying to make this a policy is all — it's some really bad times.

The truth is, Larry Summers has been marginalized within the White House. They take his opinion, and then they go and do what the political machine needs them to do. And so he is just trying to get relevant again, I think.

CAVUTO: Well, I don't know about that. I respect the heck out of you, Pat, but I am telling you, I'm wondering if this is sort of a trial balloon here, that — and maybe not such a trial or such a balloon. That he's saying effectively what is echoed in the White House, and that is, we don't really much like a lot of these corporations, and we don't like rich guys like Pat, and we want to demand out fair share, our fair pound of flesh from them.

BYRNE: Oh, yes. I certainly didn't mean to imply otherwise.

I'm saying that this is him trying to get relevant. This is a trial balloon. Yes, this is bad policy. And, you know, I try — I am not a basher on our president, and I kind of like the guy. But this is really bad thinking.

You know, a tax is just the price that a government charges for a service. That's all it is. That's the way to think of it.

If you have two plumbers in your — if you have two plumbers in your neighborhood, Neil, and let's say one gives you a good service, charges a fair price, one gives you OK service and he charges a high price...

CAVUTO: Gotcha.

BYRNE: ... of course, everyone starts using the other, that first — that plumber that sees people defecting from him, start seeing his revenue goes down, and he says, well, I'm going to cure this. I'm going to raise my prices. That will bring my revenue up.

CAVUTO: All right.

BYRNE: And you'd all understand how this crazy that is. It's just going to make things worse.

CAVUTO: We shall see.


CAVUTO: All right. Pat, we're rushed here.

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