A survey of CEOs has found that a majority think President Biden’s proposed hike in the corporate tax rate to pay for his $2 trillion infrastructure package would negatively affect their companies’ competitiveness, expansion and wage growth.
The poll released Monday by Business Roundtable of its CEO members showed that 98 percent of them said raising the rate to 28 percent from 21 percent would have a “moderately” or “very” significant adverse effect on competitiveness.
Seventy-five percent of the executives said it would “negatively affect” their businesses’ investments in R&D and innovation, while 71 percent believe it would harm their ability to hire new employees, and two-thirds said it would hamper wage growth for American workers.
In the survey, 88 percent of the CEOs polled said maintaining a globally competitive US tax policy is essential for business expansion.
“The tax system needs to support innovation, R&D, capital investment and economic growth,” said Business Roundtable Tax and Fiscal Policy Committee chair Gregory Hayes, CEO of Raytheon Technologies Corp.
“As we look toward recovering from the COVID-19 pandemic, keeping competitive tax policies in place is needed to help reinvigorate the U.S. economy and lead to more opportunity for Americans,” he said.
Before the coronavirus pandemic crippled companies because of shutdowns and safety precautions, the corporate tax rate, lowered by former President Donald Trump, acted as an engine for economic growth, job creation and increasing wages, Hayes said.
”From 2018 to 2019, major U.S. companies grew their R&D by 25 percent compared to the two years prior. The current U.S. corporate tax rate has also helped put U.S. businesses on a more level playing field with global competitors and encouraged businesses to invest and grow here in the United States,” he said.
Business Roundtable president and CEO Joshua Bolten said the tax increase would dampen the economic recovery.
“This survey tells us that increasing taxes on America’s largest employers would lead to a reduced ability to hire, slower wage growth for workers and reduced investments in research and development – all key components needed for a robust economic recovery,” he said.
“When U.S. companies can compete around the world, they can invest in America and help generate more jobs, pay higher wages and support all of their stakeholders.”
The survey was released as Biden is scheduled to host a bipartisan group of lawmakers at the White House to press his infrastructure plan.
It coincides with the return of the House and Senate after the two-week Easter recess and the beginning of negotiations over the president’s two-part “Build Back Better” proposal.
The survey polled 178 CEOs — 84 percent of the Business Roundtable’s membership — between March 8 and March 19.