Politics Janet Yellen urges businesses to support corporate tax hikes to fund Biden's infrastructure plan
Top lawmakers are meeting with Biden this week to talk infrastructure. Here's who's on the roster.
This week will see the first meeting between Biden and the "big four" of Pelosi, Schumer, McConnell, and McCarthy. Joe Manchin will also get involved.Biden's $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan include funding for not only roads and bridges, but for care-economy measures such as universal pre-K and free community college. He proposed funding the plan through an increase of the corporate tax rate to 28%, saying he is "sick and tired of ordinary people being fleeced." Republicans oppose Biden's plan as too large and focused on things apart from "traditional" infrastructure.
- Treasury Sec. Janet Yellen spoke to the Chamber of Commerce to pitch Biden's infrastructure plan.
- She urged them to support corporate tax hikes - something the Chamber spoke out against in March.
- Biden expressed willingness to compromise on the size of the tax hike but remains firm on keeping them.
Now that the entirety of President Joe Biden's $4 trillion infrastructure plan has been unveiled, his administration is canvassing for support. Treasury Secretary Janet Yellen was the most recent member of Biden's administration to make the case.
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Corporate executives and lobbyists say they are confident they can kill almost all of these tax hikes by pressuring moderate Democrats in the House and Senate. And they think progressive Democrats don’t really care about the costs of new programs and will be happy to push through as much spending as they can and then run on tax hikes in 2022 rather than actually pass them this year.
On Monday, Yellen delivered a speech to the Chamber of Commerce, which supports the interests of businesses, urging them to support Biden's infrastructure plan. Biden originally proposed funding the plan through a corporate tax hike to 28%, and given fierce Republican opposition to that idea, he has expressed willingness to negotiate on the size of the tax hike, but he is remaining firm on raising taxes on wealthy people and corporations.
Yellen told the Chamber that with corporate taxes at a historic low of 1% gross domestic product, "we believe the corporate sector can contribute to this effort by bearing its fair share: we propose simply to return the corporate tax toward historical norms."
"We are confident that the investments and tax proposals in the Jobs Plan, taken as a package, will enhance the net profitability of our corporations and improve their global competitiveness," Yellen added. "We hope that business leaders will see it this way and support the Jobs Plan."
Yellen pitches corporate tax hikes to business groups
Treasury Secretary Janet Yellen on Tuesday made a direct pitch for raising corporate taxes to the business community, telling the U.S. Chamber of Commerce that the funds would be an investment to reduce inequality and rebuild the country's infrastructure."With corporate taxes at a historical low of one percent of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share: we propose simply to return the corporate tax toward historical norms," Yellen told the Chamber at the opening of its Global Forum on Economic Recovery.
The Chamber of Commerce won't be easy to convince. At the end of March, after Biden unveiled the American Jobs Plan, it called the plan "" for proposing tax increases.
"Properly done, a major investment in infrastructure today is an investment in the future, and like a new home, should be paid for over time - say 30 years - by the users who benefit from the investment,". "We strongly oppose the general tax increases proposed by the administration which will slow the economic recovery and make the U.S. less competitive globally - the exact opposite of the goals of the infrastructure plan."
While Democrats, and Biden, support tax hikes because they believe it will level the playing field for the middle class, Republican lawmakers have also been adamant that they won't support any plan funded by that particular tax hike, which would roll back a key accomplishment of former President Donald Trump's 2017 tax cut. For example, afterin the Oval Office last week, Senate Minority Leader Mitch McConnell reporters that a corporate tax hike is out of the question.
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Rich GOP senators like Ron Johnson, Rick Scott "are the ones with the most to lose," says liberal advocacy group Ron Johnson (R-WI) Samuel Corum/Getty Images
"We're not interesting in reopening the 2017 tax bill. We made that clear to the president," McConnell said at a news conference. "That is our red line."
A group of GOP lawmakers, led by Sen. Shelley Moore Capito of West Virginia, introduced a $568 billion counter-proposal to Biden's plan last month that would be funded without any tax hikes. That group also met with Biden last week, and the president gave them ato bring him a new counter-proposal that they could restart negotiations on.
"The president asked us to come back and rework an offer so that he could then react to that," Capito told reporters after the meeting on Thursday.
The GOP group isfunding the plan through a set of charges levied on the users of a federal service or good, such as raising the federal gas tax. the support from the Chamber of Commerce.
Both Biden and Republicans are hoping to reach a bipartisan deal by Memorial Day, ahead of Speaker of the House Nancy Pelosi'sto bring a bill to the House floor by July 4.
"Let's build back better together - and build something that lasts for generations," Yellen said. "We Americans deserve a better deal."
Biden declares his 'economic plan is working,' pushes infrastructure plan as the next step .
In a speech in Cleveland, Biden will counter a Republican narrative that the economy is moving in the wrong direction as inflation picks up.Biden looked to seize control of competing economic narratives as Republicans point to rising inflation as a sign he is moving the economy in the wrong direction with his big-spending measures.