Disney Dispute Reflects Wider Rift Between Republicans, Big Companies

The

Disney

dust-up captures the conflict. The entertainment giant, a large employer in Florida, at first said it would keep out of the fray over Mr. DeSantis’s controversial Parental Rights in Education bill—dubbed by opponents “Don’t Say Gay”—which prohibits classroom instruction about gender identity or sexual orientation through third grade.

But after vocal pressure from some employees, Disney came out against the law, which it said would unfairly target the LGBT community. In response, Mr. DeSantis called Disney a “woke corporation” and promptly pushed lawmakers to eliminate special Disney tax benefits.

Disney is hardly alone in recent years in taking public stances, often against Republican-backed measures, on behalf of—or under pressure from—its workers. In some instances, CEOs have said they feel obliged to speak on important issues such as gender or race.

After the Jan. 6, 2021, riot at the U.S. Capitol, a number of companies paused donations to Republican lawmakers who objected to ratifying electoral votes for President Biden.

That response still makes some Republicans angry—as do other issues. In Georgia last year, when a voting law drew public opposition from companies including Georgia-based

Coca-Cola Co.

and

Delta Air Lines Inc.,

Senate Minority Leader

Mitch McConnell

(R., Ky.) told them to “stay out of politics.”

Companies have come out against other Republican state bills, including Arkansas’s first-in-the-nation ban on gender-transition treatment for children—opposed by Mars Inc., Nestlé USA and

Unilever

PLC, among others—which has since been blocked by a court. Texas’ recent abortion law was decried by companies including the dating app

Bumble Inc.,

ride-sharing service

Lyft Inc.

and cloud-storage company

Box Inc.

For some Republicans, particularly those considering 2024 presidential bids, the rise of President

Donald Trump

had already inspired more criticism of big multinationals amid a backlash against globalization policies that often led to offshoring of jobs. Rising competition with China has added fuel to the fire, and Republicans have criticized the dealings of

Nike Inc.

and

Apple Inc.

in a country accused of human rights abuses.

At a recent Senate Commerce Committee hearing, Florida Sen.

Rick Scott

pressed

Intel Corp.

Chief Executive

Pat Gelsinger

over the company’s work in China and questioned why the company needs a slice of the $52 billion Congress is considering for the semiconductor industry. Mr. Gelsinger countered that Intel is creating high-paying U.S. jobs and can address supply-chain problems.

The murder of

George Floyd

by Minneapolis police officers and harsh battles over social issues like school curricula have elevated those topics in political campaigns. Some Republicans on the stump this primary year are seeking traction with base voters by portraying big companies as “woke,” elitist entities backing liberal policies.

It’s fertile ground: Pew Research Center surveys show that the share of Republicans who say big companies have a positive impact on the way things are going in the U.S. has dropped 24 percentage points between 2019 and 2021, to 30% from 54%. Among Democrats, for whom attacks on companies have long been more common, positive views of big business have gone up, to 28% from 23%.

As the Republican Party embraces more populist policies, some politicians warn of a deepening divide. “They think because Republicans have always been pro-business that we’ll tolerate their high-jinks,” said Sen.

John Kennedy

(R., La.). “They’re finding out that it’s different, much different.”

In a recent interview, Mr. Trump told The Wall Street Journal: “Corporate America is trying to be politically correct, but actually they are going against what this country really wants and being very foolish. Disney was a great company, but it’ll destroy itself if it keeps going down this line.”

Disney has declined to comment on its Florida imbroglio in recent days. The Journal reported this week that the company has embraced a low profile in hopes Republicans in Tallahassee will reconsider the move to dissolve the special tax district. But the drama has been closely watched.

Daryl Brewster, head of Chief Executives for Corporate Purpose, a nonprofit of more than 200 business leaders focusing on companies’ social strategy, said he has heard from about a dozen CEOs since the Disney conflict began. “Many are happy it’s Disney, not them,” he said. “Whether companies like it or not, in today’s world, particularly among big, well-known companies, they are in the spotlight.”

Beyond politics, the rift extends into policy areas where business and Republican long forged alliances. A handful of Republicans have said they are open to the possibility of higher corporate tax rates, which were cut to 21% under a landmark, Trump-backed bill in 2017. “I would not rule that out,” Sen.

Josh Hawley

(R., Mo.) told the Journal.

Sen.

Marco Rubio

(R., Fla.) also has said he doesn’t see the current corporate tax rate as sacrosanct and has proposed curbs on corporate stock buybacks.

“It’s very simple, and that is we need to stop thinking about major American corporations as American,” Mr. Rubio said. “They don’t act in the best interests of the country. They act in the best interest of the shareholders, and that’s their job. But we as policy makers need to be acting in the best interests of the country.”

Not everyone sees the divide as so deep.

Grover Norquist,

longtime president of Americans for Tax Reform, which advocates for low taxes and small government, calls the current rift overstated, with most rhetoric coming from a handful of Republicans who lack the numbers in Congress to force anticorporate measures.

“It’s a freebie, because you’re not firing with real bullets,” Mr. Norquist said.

He notes that an overwhelming majority of GOP lawmakers in Congress have signed his no-new-taxes pledge, which would apply to raising rates on companies. “That’s just not happening,” Mr. Norquist said. Recalling the 1992 presidential election, he said: “Everybody watched George Herbert Walker Bush throw away a perfectly good presidency for one mistake—the tax hike.”

Some Democrats also scoff. “There’s no genuineness to it,” said Sen.

Sherrod Brown

(D., Ohio). “Every time they have a chance to prove it—‘OK, support the child tax credit. Pay for it by just slightly edging up the corporate tax rate or the upper level, after it was dramatically brought down five years ago’—[Republicans say], ‘I’m sorry, we can’t go there.’ ”

Still, there’s little doubt the party has traveled some distance from the days when Republicans worked more closely with big business with priorities like broad global trade agreements. The emergence of the tea party movement followed by the ascension of Mr. Trump, a supporter of tariffs, steered many Republicans toward more protectionist policies. Another turn came on immigration, which many companies have long backed as essential to growth but against which Mr. Trump drew sharp lines.

“It is no longer a wealthy party, they’re not trying to appeal to wealthy voters,” said Sam Geduldig, a Republican lobbyist for CGCN Group, a public affairs firm. “They’re certainly not trying to cater to elites.”

Mr. Geduldig noted the Republican coalition now includes parents upset with masking in schools, those who oppose abortion and favor gun rights, and a growing number of Hispanic voters. “It’s no longer reflexively big business but it’s small business, it’s rural America,” he said.

Another change is the rise of online, individual political donations, which have lessened the importance of business and industry PAC campaign donations.

Mr. McConnell, in his 2020 campaign, raised $27.8 million from donors who gave $200 or less. In his prior races in 2008 and 2014, the figure was about $900,000. According to Federal Election Commission filings, PAC contributions accounted for about 1 in 20 donations in 2020—where previously they were about 1 in 5. The campaign of House Minority Leader Kevin McCarthy (R., Calif.) followed a similar pattern.

Overall in 2020, contributions from people giving $200 or less made up 22.1% of all campaign funds for Republican House members and 30.3% for Senate Republicans, according to data from the nonpartisan Center for Responsive Politics. Both of those figures were the highest since at least 2000, the earliest year for which data was available.

Mr. Hawley, who said last year that he no longer would accept corporate PAC donations and has advocated for breaking up major technology companies, said the shift away from big business has already taken place among GOP voters, and elected officials are now catching up to their base. He said he hopes and expects the change to be permanent.

“I hope that from a social point of view, these companies won’t think that, ’Well, we could take all these government benefits and so forth and push a very political agenda—that’s also a very left agenda—but keep getting all of our special handouts,’ ” he said. “As if it’s their right to have these handouts.”

—Chad Day and Cameron McWhirter contributed to this article.

Write to Alex Leary at [email protected], Lindsay Wise at [email protected] and Emily Glazer at [email protected]