Unlikely corporate backers in battle over US taxes

The differing strategies — highly public meetings with corporates and private arm-twisting with Wall Street — both appear to be aimed at winning support for higher taxes on the wealthy. The trade-offs being roundly fought over in Washington, like what government programmes may be cut and which entitlements may be spared, are less important in this effort to muster highly compensated chieftains whose support for tax increases will provide cover for Congressional Republicans wary of being seen as too quick to compromise on higher tax rates.

What’s more, the political symbolism of some of the wealthiest Americans saying they support higher taxes on the rich takes a bit of the sting out of the idea of raising rates, for both Democrats and Republicans. Indeed, by appealing to both camps and enlisting their support, Obama hopes to neutralise potential critics, according to allies of the president on Wall Street.

Obama’s supporters cited the example of Frederick W Smith, the chief executive of FedEx. Last week, Smith signalled he was not angered by higher tax rates for the wealthiest individuals, a centrepiece of Obama’s plan to reduce the deficit and a key sticking point for Republicans in Congress.

“If people who didn’t support the president believe the president is acting reasonably, they’re going to put pressure on the other side,” said Marc Lasry, a longtime supporter of the president who runs Avenue Capital. “You need both sides to be reasonable.”

For example, Lasry invited the real estate tycoon Barry Sternlicht, a onetime Obama supporter who

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