- President Joe Biden’s infrastructure package includes an increase in the corporate tax rate.
- He briefed several bank CEOs on the package the morning before the announcement, the WP reports.
- Business had a mixed response to it, while it has broken clearly with the GOP on several issues.
- See more stories on Insider’s business page.
President Joe Biden wants to increase taxes on corporations with his American Jobs Plan – and he let some leading business executives know before he announced it.
According to The Washington Post, the Biden administration briefed Brian Moynihan, the CEO of Bank of America, and David M. Solomon, the CEO of Goldman Sachs – along with “four other chief executives of the country’s biggest banks” – the morning of the infrastructure plan’s announcement.
They weren’t the only ones briefed, according to the Post; “in a 24-hour period,” groups like the Business Roundtable, the Chamber of Commerce, and National Association of Manufacturers also heard from White House officials, with outreach to thousands of small businesses also being planned.
All three of those groups have raised public objections: The Chamber of Commerce has come out against the corporate tax hikes, as have the Business Roundtable and the National Association of Manufacturers.
According to the Post, Commerce Secretary Gina Raimondo “has spoken to more than 50 leading executives in recent days about the plan.”
On the whole, the business reaction to that hike has certainly not been uniform, with CEOs surveyed by the Business Roundtable saying that the increase could impact hiring and wage raises, but Amazon CEO Jeff Bezos saying he supports an unspecified increase to the corporate tax rate, while Lyft cofounder and President John Zimmer supports the 28% rate.
But overall, the reaction from the business community has been somewhat tepid, as many businesses have opted to stay silent. The Post partially attributes this to the weakened relationship between the business community and the GOP, which accelerated after the January 6 insurrection on the Capitol.
Many prominent business leaders – including at least one who had previously supported President Donald Trump – spoke out against those attacks. More recently, some businesses have stepped up to voice their support for voting rights and access following the passage of a restrictive voting bill in Georgia, as some activists called for boycotts of companies that did not take action.
Republicans have come out against the proposed increase, which would bring the corporate tax to 28% from 21%. That’s still lower than the 35% rate in place prior to the Trump administration’s 2017 tax cuts. As Insider’s Joseph Zeballos-Roig reported, the GOP has instead been suggesting that average people shoulder the cost of infrastructure improvements in the form of “pay-fors.”
But another reason that the response has been tepid could be a looming compromise: Axios reported that Senate Democrats will push a 25% corporate tax rate, an amount that powerful moderate Sen. Joe Manchin has signaled his support for.