The president of North America’s largest bicycle manufacturer has
slammed President Donald Trump over his
corporate-tax reform, failed leadership, and misguided
“America First theory.”
John Burke, the head of Waterloo, Wisconsin-based Trek Bicycle Corp., lambasted Trump
during an interview with Business Insider on Thursday, saying he
missed a huge opportunity to simplify a complicated tax system
and has failed to lead the country.
“We’re 100 days in and he finally comes out with a tax plan — and
it was 250 words? And there was no bad news,” Burke said. “Here’s
this huge opportunity to simplify everything and to have massive
change, and you get 250 words.”
While Trump’s tax plan contains broad outlines rather than firm
legislative text, Treasury Secretary Steven Mnuchin and National
Economic Council Director Gary Cohn said the plan would include
“the biggest tax cut” in US history, echoing statements made by
Trek, a family-owned company, was cofounded by Richard Burke,
John’s father, in a Waterloo barn in 1976. Today it is a global
bike business worth over $1 billion, and it employs 2,000 people
worldwide. It makes a variety of bikes, including kids’ bikes,
mountain bikes, and high-end road bikes. It also owns the
Trek-Segafredo team that competes
in the Tour de
Burke, who says he is neither a Republican nor a Democrat but an
independent, is the author of “12 Simple Solutions to
Save America,” published in 2016, which “challenges Americans
to resist the status quo and change what elected officials are
unwilling or unable to change.”
“Look, I don’t need a tax break — Trek doesn’t need a tax break,”
Burke told Business Insider. “We’re going to succeed and fail in
the market based on how good our products are and how good our
services are. As a member of the community, we have a moral duty
to be a good corporate citizen, and one way you’re a good
corporate citizen is you pay your taxes.”
Burke added that, from a competitive standpoint, American
corporate taxes should come down — but so should all the
deductions. And while he did praise Trump for reducing the number
of tax brackets, he criticized him for not getting rid of
corporate deductions altogether.
“You have General Electric, a great American company, which made
a profit of $12 billion. They filed a 57,000-page tax return and
paid zero in taxes.
“So if you want to reduce corporate taxes, that’s fine, reduce
them,” Burke went on, “but Trump wants to reduce them from 35% to
15%, and I think that’s too big a decline. But then he doesn’t
want to get rid of any of the deductions?
“Why do oil companies get deductions and bicycle companies don’t?
Why do certain industries get deductions and shoemakers don’t?
The brewer doesn’t get a deduction. It doesn’t make sense. You’re
leaving in place this super-complicated tax system.
“So it’s treats for everybody. For corporate America, you get a
lower rate, and you get to keep your deductions. And for all the
individual taxpayers, you get a lower rate.
“We’re 19 trillion frickin dollars in debt and everybody got a
treat. And I just go, ‘You’re kidding me.’ You call that
leadership? I don’t.”
On misguided ‘America First theory’
Burke also criticized Trump on his leadership of the country.
“When you’re the president of the United States and you come out
with this ‘American First’ theory, what are you saying to the
rest of the world?
“I’ve been so fortunate here in growing the business. When I
started here, we were doing $16 million and now we do over a
billion dollars, and I’ve worked with an incredible team to do
that. We took the business from just being in the US to right now
— 60% of our business is around the world.
“And one of the reasons why American is as strong as it is, is
there are a lot of great American companies who have access to
markets all around the world — General Electric, Coca-Cola,
Apple, Trek, Harley-Davidson.
“The whole ‘American First’ thing … I just don’t find that
conducive to America’s future or anyone else in the world.”
Lack of leadership
“The best definition I ever heard of leadership is, leadership is
the ability to make the dream a reality at the grassroots level,”
Burke added. “But leadership is also, “Here’s the vision, and I’m
going to convince people where we need to go.” And what we’ve
come to in American politics is saying, ‘Well, I need to get
elected, so I’m going to tell all these people whatever they want
“You know, if you’re the richest person on the playground and
you’re the biggest person on the playground … you know, we
usually lead like, ‘Talk softly and carry a big stick,’ and when
we’re walking around with a blow horn, that’s not the way we
“We’re a leader in the world, but to maintain that status over
the long haul, you actually need a leader who can look at the
people and say, ‘You know, we’ve got problems here’ — and whether
your talking about tax codes, gun control, nuclear proliferation,
big issues — ‘Here are the problems, and here are the solutions,
and this is why we need to do it.’
“And more than just a sound bite, we’ve got to educate people and
say, ‘This is why we need to move here.’ And I think we lack that
right now, and I think we’ve lacked it for a while.”
Trump once sponsored the biggest bicycle race in America —
— which ran for two years, 1989-1990,
before being taken over by DuPont.
Trump’s proposal did not include a large number of key details,
including the income levels associated with a new three-bracket
tax system, the tax rate for a one-time repatriation of corporate
profits held overseas, and others.
Here are the key points of the Trump plan:
Corporate tax rate of 15%: Such a rate would
deliver on Trump’s campaign promise.
The current federal statutory rate is 35%.
Allows pass-through rate for business owners:
Instead of self-owned businesses being taxed at the personal
income rate, business owners would have incomes from operations
taxed at the 15% rate. So if you own your own business, income
from that business would be taxed at the corporate rate.
According to The New York Times, that could apply to the Trump
No border-adjustment tax:
The tax on imports was favored by House GOP leaders such as
Speaker Paul Ryan and Kevin Brady, the chair of the Ways and
Means Committee. Mnuchin said the White House talked to Ryan
and Brady but thought the tax did not “work in its current
A slight adjustment to individual tax rates:
White House officials said there would be three tax brackets
with rates of 35%, 25%, and 10%, down from the current seven
brackets. Cohn told reporters that he did not have the exact
incomes associated with the brackets.
Doubling of the standard individual tax
deduction: This would allow individual filers to
deduct their first $12,700 in income from their taxes and
$25,400 for joint filers, as opposed to the current $6,350 for
individuals and $12,700 for joint filers.
A one-time repatriation tax: This would allow
companies to bring back money from overseas to the US with a
slightly lower, one-time tax. The White House did not clarify
the rate at which this money would be taxed. President George
W. Bush enacted a repatriation tax at a 5.25% rate in 2004, but
studies show the money brought back
mostly went to stock buybacks and dividends rather than
Elimination of the estate tax: This would
eliminate a tax on assets being transferred through a will.
Elimination of itemized tax deductions other than
charitable donations and mortgage payments: Mnuchin
said this provision would close “loopholes” and offset the
decrease in base tax rate for high income Americans.
Repeal a 3.8% tax on net investment income:
The tax was levied on “individuals, estates and trusts” with
higher than a certain threshold in investment income. For
the threshold for an individual was $200,000 in investment
income last year.
Repeal the alternative minimum tax: This tax
requires some people who have large numbers of deductions to
calculate their income tax under the normal tax rate and the
alternative and pay the higher amount. According to the Tax
Policy Center, the tax was originally designed to eliminate
large deductions by wealthier people, but now applies to about
5 million people.
No infrastructure spending:
Reports on Tuesday said Trump was considering including
infrastructure spending in the plan to try to win over
Democrats. Mnuchin denied the report in the speech, saying the
proposal would be “just a tax plan.”
You can listen to Burke discussing “12 Simple Solutions to
Save America” in 2016 below:
Bob Ryan contributed reporting.