Top executives of companies that have given speeches on the need for infrastructure spending in the past are mostly silent and prefer to complain privately that Biden’s plan is too expensive, too biased, overloaded with unrelated social policies and not at all what they are into. had no idea. . Jeff Bezos, CEO of online retailer Amazon, issued a statement on Tuesday that looked at first glance like an endorsement of Biden’s plan.
Except that it was not.
Bezos, like other CEOs, is nodding in the direction of adopting a higher corporate tax rate – although he actually puts his name behind it. But he avoided expressly supporting Biden’s infrastructure proposal and called for a ‘balanced solution’ to increase US competitiveness. At first glance, the business world despises Biden’s plan in its current form and is determined to defeat it.
“This plan would make America less competitive, which would mean less economic growth in the US and less job creation,” said Neil Bradley, chief policy officer at the Chamber of Commerce. ‘The benefits of infrastructure are offset by punitive tax increases. And if they continue with only Democratic votes, the concept of doing anything on a dual basis would be over and it would only reinforce the kind of timetable that hindered progress in every other issue. ‘
Managers of some of America’s largest companies are complaining bitterly about the White House approach in privacy, arguing that raising the highest corporate rate to 28 percent from 21 percent – without repairing the deductions made in then-President Donald Trump ‘s tax reduction bill for 2017 has been removed – would cause damage. rent and the economy.
And they say the introduction of a global minimum tax that other countries may not adopt will drive more jobs and profits out of the US. They also complain about the lack of adequate outreach to the business community before the infrastructure plan is rolled out and are concerned that Biden abandons its campaign promising to work on such comprehensive legislation on a dual basis.
Managers often say that they could live with a corporate tax rate of about 25 percent – which groups like the Business Roundtable had previously supported – but only with the deductions that were restored and without much of the international reform.
‘I did not think 21 per cent was the right number when we did tax reform. And 25 percent is a place where you could probably get a lot of consensus, ‘said the CEO of one of the largest financial companies in the world, provided they are not named. “It’s not the rate, it’s all the other things that will make us less competitive around the world. And work will go if we do these things. ‘
The chief executive added that the business community in general did not lag behind any bill with only Democratic support being driven by the budget reconciliation process – a maneuver that would allow legislation to clear the Senate by a simple majority – which the White House used to pass his $ 1.9. billion stimulus bill.
‘It really does matter if it’s completely biased. It sounds cliché but business people really want to sit in the middle and get behind things that have dual support, ”said the CEO. Biden has made many promises to do these things differently. But while it has a shiny veneer, it looks a lot like Trump is doing everything his way. ‘
A leading executive at a Fortune 100 technology company says it’s easy for Amazon and other businesses to nod for their willingness to pay a higher total rate. But the executive said the corporate world would fight much of the rest of the proposal.
“None of these guys can realistically resist at a rate of 25 percent,” the executive said. “That’s not where the fight is. Anyway. “
Both executives say that outside of a few hastily arranged conference calls shortly before Biden introduced his ‘American Jobs Plan’, there was not much outreach to the business community, a complaint that upsets former President Barack Obama throughout his two terms has.
The White House largely rejects these complaints. Administration officials note that many executives, including JPMorgan Chase CEO Jamie Dimon, previously supported a top 25 percent corporate rate, but only slightly shy of the 28 percent Biden proposes.
They also say that Mitt Romney, a 2012 GOP presidential candidate, ran on a platform with a top rate of 25 percent and that Larry Kudlow, director of the National Economic Council, mostly praised the Romney plan.
On involvement, say administration officials Cedric Richmond, White House board member who heads the Public Involvement Office, and Brian Deese, director of the National Economic Council, with heads of Bank of America, State Street, Wells Fargo and Goldman Sachs on infrastructure. planned in a session organized by the Financial Services Forum.
They also say that Richmond and Deese have informed 25 CEOs of the Business Roundtable. And other officials spoke with trade groups such as the National Association of Manufacturers and the Aerospace Industries Association, along with executives from leading Internet broadband companies and agricultural representatives.
More generally, White House officials say that while Biden is committed to covering much of the cost of the $ 2.5 billion plan, he acknowledges that a conversation about exactly how to do it is just started.
The White House still hopes to eventually reach a bilateral agreement, even though all signals indicate that Biden is willing to sign a bill with only Democratic support.
“We want to work across the corridor with information sessions and discussions with IDP legislators,” said NEC deputy director David Kamin. “As far as corporate tax reform is concerned, the president has put it forward and it is his idea how it can be paid for, but he is really willing to hear other ideas.”
Kamin added that “if others have ideas they want to propose, then it should be part of the discussion.”
Perhaps the biggest fear in the U.S. Chamber of Commerce right now is the idea of a minimum tax rate of 21 percent on foreign income of U.S. companies, which, according to executives and conservative economists, will hurt U.S. businesses and lead to U.S. businesses again. “Inversions” in which they take overseas addresses.
Treasury Secretary Janet Yellen urged developed countries on Monday to adopt a global minimum tax rate as a way to reduce potential anti-competitive disadvantages that could arise from Biden’s proposal.
But business groups say there have been talks for years about a global minimum tax and there is no guarantee that any agreement will be reached soon. “It would certainly be great if we had a system where all the advanced countries work together in harmony,” said a tax expert working with companies that are against Biden’s plan in its current form. “But we’ve been talking about this for years and tax competitiveness and the right to set your own tariffs has always been a big issue of national sovereignty for other governments.”
The White House, in turn, says it encourages its plan, but does not rely on an international tax treaty. “We are addressing this with a reform that if you are a foreign company in a country that does not accept a minimum tax, then you will get denial of deductions,” Kamin said. “It means we’re actually comparing the playing field.”