Some of the largest companies in the country are pushing back on the proposed corporate tax hikes included in President Joe Biden’s infrastructure and jobs plan.
The stance, while not an outright rejection of the spending outlined in Biden’s proposal, mirrors that taken by House and Senate GOP leaders Kevin McCarthy and Mitch McConnell at the White House on Wednesday.
The Republican lawmakers told reporters following their Oval Office meeting with Biden that while they reached a consensus to find a bipartisan compromise, the GOP won’t help pass a bill “revisiting the 2017 tax bill.”
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“We both made that clear with the president,” McConnell stated. “That’s our red line.”
Biden’s proposal would raise the corporate tax rate from 21% to 28%, erasing some but not all of the corporate tax reductions written into law by the 2017 Tax Cuts and Jobs Act. The Biden administration, according to Wall Street Journal, is trying to sell the increase as an investment, but a number of companies have expressed concerns that a rate increase of that size would stifle economic recovery and future expansion.
“It’s sort of confusing to me what the policy goal is here,” Eli Lilly and Company CEO David Ricks told the newspaper. “Industry drives a huge amount of capital spending and private infrastructure. Taxing that seems like a bad idea when we try to recover the economy.”
Top executives at both Johnson & Johnson and SL Green Realty offered matching sentiments on recent investor calls.
“If we were to raise rates even to 25%,” Johnson & Johnson CFO Joseph Wolk said of a counterproposal favored by West Virginia Sen. Joe Manchin and a number of other lawmakers, “and you include tax from states, we become the highest-rated developed country in the world with respect to tax rates.”
SL Green Realty CEO Marc Holliday was even more direct in his assessment: “Nobody wants a tax increase. I mean, that’s for sure.”
AT&T finance chief Pascal Desroches similarly told the Wall Street Journal that his company has urged the White House not to adjust the current corporate tax rate but added that should Biden’s plan be passed into law, “we’ll navigate it just like everybody else.”
The Biden administration has additionally framed its infrastructure proposals on the idea that the wealthiest Americans and companies should be paying their fair share in taxes so that the country can fund these desperately needed spending packages.
Amazon, which was specifically singled out by the president for taking advantage of the current tax code, and a handful of the country’s largest technology companies gave their blessing to Biden’s proposed hikes, yet the U.S. Chamber of Commerce, the nation’s largest corporate lobbying group, argues that small businesses employing more than 13 million people will be just as likely to be negatively affected by the rate change as Amazon and other giants.
The Business Roundtable, a nonprofit group of CEOs, based in Washington, D.C., suggested in April that instead of raising corporate taxes, Biden fund his proposal through user fees and borrowing even more money.
It should be noted that the White House has repeatedly stated, in terms of “red lines,” the only provision Biden won’t negotiate on is not raising income taxes for people making less than $400,000 per year.
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White House press secretary Jen Psaki routinely says in press briefings that the White House is eager to hear alternative infrastructure proposals from lawmakers but that the funding has to come from somewhere other than taxes on the lower and middle classes.
