Rep. Dan Meuser, R-Pa., On President Biden’s tax plans.
US CEOs fear that an increase in the corporate tax rate could affect the competitiveness of US companies and ultimately backfire on shareholders and employees.
In a statement Tuesday, Gregory Hayes, chair of the Business Roundtable Tax and Fiscal Policy Committee who is also CEO of Raytheon, said that an increase in the corporate tax rate would “have a significant negative impact on hiring and investment plans” and likely to affect economic growth would affect.
“We urge policymakers to take the opportunity to compromise on a bipartisan infrastructure package for the benefit of American workers and families,” said Hayes.
The Business Roundtable said increasing corporate tax from 21% to 28%, as proposed by President Biden, to pay for spending initiatives would undermine the competitiveness of U.S. companies and ultimately be borne by the company’s shareholders and employees.
98 percent of respondents said the tax hike would have a moderate to significant impact on their company’s competitiveness, a previous survey by the group found. Two-thirds of CEOs said it could slow employee wage growth.
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Regarding the global minimum tax that Biden promoted along with the group of 7 Treasury Ministers over the weekend, Hayes noted that not all countries around the world have the same business opportunity infrastructure as the US, and therefore sometimes use lower tax rates as an incentive.
However, he said it would be beneficial for US multinationals to have a unified global tax system.
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The Business Roundtable released its CEO Economic Outlook for the second quarter on Tuesday, which lists record hiring plans. Three-quarters of participants said that conditions for their businesses have either already recovered or will recover to pre-pandemic levels by the end of the year.
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The CEOs also forecast a 5% growth rate for the year, which is higher than their first quarter estimates.
Jennifer Schonberger from FOX Business contributed to this report.