Business

CEOs say proposed Biden tax hike would hurt competitiveness

Large-company CEOs who are members of a top business group share a nearly unanimous sentiment that President Biden’s proposed tax hikes would hurt business competitiveness.

The internal survey from the Business Roundtable, which has come out forcefully against the tax hikes, found that 98 percent of its members thought the proposed tax hike would have moderately or very significant adverse effects on their companies’ ability to compete. 

Three-fourths said it would hamper research and development investment, 71 percent said it would slow hiring and almost two-thirds said it would slow wage growth. 

“The proposed tax increases on job creators would slow America’s recovery and hurt workers,” added Business Roundtable President Joshua Bolten.

“This survey tells us that increasing taxes on America’s largest employers would lead to a reduced ability to hire, slower wage growth for workers and reduced investments in research and development—all key components needed for a robust economic recovery.”

Biden has proposed increasing corporate tax rates from 21 percent to 28 percent in order to pay for his $2.3 trillion infrastructure bill.

The Business Roundtable has strongly supported a major federal investment in infrastructure to upgrade roads, bridges, ports, transportation and telecommunications, but has been vociferous in its opposition to hiking corporate tax rates to pay for it.

In 2017, former President Trump signed a tax cut lowering the rate from 35 percent to its current level. The Business Roundtable and other business groups pointed to the low unemployment rate and rising wages as evidence that the lower taxes helped spur the economy. 

Critics, however, say that the tax cut led to little increased business investment, and say the economic benefits were a temporary uptick from the tax cuts’ $1.9 trillion stimulus effects.

They also say that some alternative methods of paying for infrastructure, such as a gas or mileage tax, would be more regressive, putting a higher share of the burden on poorer members of society.

But even some key Democrats are opposing the 7-point increase in the corporate tax rate. Sen. Joe Manchin (D-W.Va.), a pivotal swing vote, said the rate should increase to no higher than 25 percent.

Biden has signaled an openness to other ways of financing the bill, but said it should be paid for. Sen. Chris Coons (D-Del.), a Biden ally, suggested last week that the total price tag was likely to come down, but that part of the package could be financed with increased federal borrowing.

Tags Chris Coons Donald Trump Joe Biden Joe Manchin

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File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)
File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)

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