U.S. President Joe Biden discusses his ‘Build Back Better’ agenda for economic growth and job creation following early morning Senate passage of the bipartisan infrastructure bill and the budget resolution, during a speech in the East Room at the White House in Washington, August 11, 2021.
Evelyn Hockstein | Reuters
The Business Roundtable, a large and powerful group consisting of prominent corporate leaders, said Tuesday that Democrats’ proposed corporate tax hike is one of the greatest threats to companies’ investment, hiring and growth plans in the foreseeable future.
The organization said its third-quarter CEO survey showed that chief executives have three primary concerns: difficulty finding and retaining qualified workers, a possible rise in the corporate tax rate, and slow Covid-19 vaccine uptake.
“Increasing taxes on America’s largest job creators by almost $1 trillion—nearly three times the net corporate tax cut from 2017 tax reform—would be one of the largest corporate tax increases in history,” said Business Roundtable President and CEO Joshua Bolten. “Tax increases on job creators would make it harder for U.S. companies to compete and would hinder investment in America.”
The Biden administration and congressional Democrats are working to pass a $3.5 trillion bill to modernize and expand the U.S. public safety net that would impact most Americans. The legislation broadly seeks to tackle poverty, address critical climate risks and provide expanded worker benefits. The final price tag will likely be lower as centrist Democrats push for cuts.
To help pay for what would be one of the largest bills in the nation’s history, Democrats have proposed raising the corporate tax rate to 26.5%. Former President Donald Trump’s 2017 tax legislation lowered the rate to 21% from 35%.
The party has also proposed a top individual income tax rate of 39.6%, a 3% surcharge on individual income above $5 million and a capital gains tax of 25%.
The Business Roundtable conducts a survey each quarter of some of the nation’s CEOs to stay apprised of the hurdles and tail winds businesses are facing. The group conducted the current poll between Sept. 2 and Sept. 21 with 160 responses.
The Roundtable survey also showed CEOs remain upbeat on the overall U.S. economy, but indicated they are now slightly less optimistic than they were in the second quarter given a decline in expectations for sales.
The organization’s survey suggested CEOs are trying harder to bolster payrolls and continue to warm to big-ticket capital projects like new factories, equipment and the like.
Walmart CEO Doug McMillon’s comments suggested there is widespread support among corporate leaders for the $1 trillion bipartisan physical infrastructure plan before Congress.
“Investment in our nation’s infrastructure is urgently needed,” McMillon, who is also the Roundtable’s chairman, said in prepared remarks.
“We applaud Congress for scheduling a vote on the bipartisan Infrastructure Investment and Jobs Act this coming Thursday,” he added. “We urge every member of the House of Representatives to vote yes on this once-in-a-generation opportunity to generate significant investment in America’s transportation, water, energy and communications systems.”
House Speaker Nancy Pelosi, D-Calif., said over the weekend that her chamber will vote on that bill on Thursday. The infrastructure proposal includes $110 billion in new funding for roads, bridges and other major surface projects, $39 billion for public transit, and $15 billion for electric vehicles and buses.
Pelosi has been hard at work with a long list of critical votes not only to pass President Joe Biden‘s economic agenda, but also to approve a funding bill before the government shuts down later this week and to avoid a looming U.S. default.