According to a poll released Monday, the heads of America’s largest corporations overwhelmingly believe that Joe Biden’s proposed increase in the country’s corporate tax rate would have a negative impact on their businesses.
Influential business lobbying group Business Roundtable, which includes Amazon’s Jeff Bezos and Apple’s Tim Cook, released a poll of 178 CEOs on their thoughts on corporate tax hikes. The survey asked CEOs specifically about the president’s proposed corporate tax hike, which aims to raise the corporate tax rate from 21% to 28% to pay for his $ 2.3 billion infrastructure plan.
According to 98% of the CEOs surveyed, a corporation tax increase would have a “moderate” to “very” severe impact on their company’s competitiveness on a global scale. Three quarters of CEOs said the tax would negatively affect their ability to conduct research and development innovations, and 71% said it would negatively affect their ability to hire new employees.
The corporate tax rate hike, as well as a proposal for higher taxes for companies seeking lower tax rates abroad, are part of Biden’s plan to reverse Donald Trump’s 2017 tax cuts.
When the cuts were passed, Republicans argued that doing so would encourage domestic investment, which would increase labor productivity and, ultimately, raise wages. Democrats and some economists are skeptical that the benefits of the cuts in the pre-Covid-19 pandemic economy were seen.
A report released earlier this month by the Progressive Tax and Economic Policy Institute found that at least 55 of America’s leading companies, including FedEx and Nike, were not paying federal corporate tax due to loopholes and substitutes. The report found the tax break cost $ 8.5 billion in potential tax revenue.
“Our tax revenues are at the lowest level in generations,” Treasury Secretary Janet Yellen told reporters last week. “If they keep falling, we will have less money to invest in roads, bridges, broadband, and research and development.”
Business leaders and lobby groups have raised similar concerns in recent weeks that Biden’s tax plan would harm businesses and ultimately offset the progress of his infrastructure plan.
“It will actually avoid any economic gains we could possibly get from infrastructure,” Neil Bradley, executive vice president of the US Chamber of Commerce, told the Washington Post.
The US Chamber of Commerce and other corporate groups have promised to oppose the corporate tax hike. While Republicans generally supported infrastructure spending, the party against tax hikes is unanimous. This means that moderate Democrats, especially Joe Manchin, the party’s most conservative Senate member, will be the stars of the debate over a possible increase.
Manchin have already said that they would not support a 28% increase, but said that moving to 25% is something they could leave behind.
“We have to be competitive and we are not going to be careful,” he told a local West Virginia radio station.