Washington — Former President Donald Trump told an influential group of CEOs that he wants to lower the corporate tax rate that he reduced while in office, while President Joe Biden’s chief of staff told them that the Democratic incumbent’s emphasis on global alliances would benefit their companies.
Both Trump, the probable Republican nominee, and Jeffrey Zients met behind closed doors with the Business Roundtable in Washington on Thursday, with Zients filling in for Biden during the president’s meetings with Group of Seven leaders in Italy. The renowned group representing over 200 CEOs just launched a fight to protect the tax incentives for corporations that Trump signed into law in 2017.
Neither side has commented publicly on what was discussed at the discussion, which comes as Biden and Trump prepare for a 2020 rematch with drastically opposing views on taxes and the economy. According to a person familiar with Trump’s remarks who asked on anonymity to discuss the closed-door discussion, he expressed a desire to reduce the corporation tax rate by a percentage point to even 20%. According to the individual, the former president’s statements were on taxation, inflation, and the need for increased oil output.
According to another individual involved with the conversations, Zients argued that America’s global reputation and independent institutions, such as the Federal Reserve, produced the type of trust that allowed US capitalism to prosper. The words were a swipe at Trump’s team, as the former president had previously threatened allies with tariffs and demanded greater control over Fed policy.
According to Zients, the Biden administration collaborated with businesses on topics such as supply chains, which helped to facilitate the post-pandemic economic recovery. And he warned the CEOs that Trump’s promises to deport millions of people and launch trade wars might drive up inflation. The individual also insisted on anonymity while discussing meeting details, citing a lack of public authorization.
The Business Roundtable has identified reducing taxes as its top legislative priority. The group declared that it would spend at least $10 million on a campaign to retain the corporate tax rate at 21%, as well as support business-friendly revisions to the US tax system and seek to expand tax breaks for R&D.
Part of the 2017 tax cuts signed into law by President Trump will expire after 2025, presumably raising rates for the majority of American households. This sets up a battle between Democrats and Republicans over how to overhaul the tax code.
Leaders from both parties want to keep the cutbacks for individuals making less than $400,000. However, other Trump supporters want to broaden the tax cuts, including for businesses. Biden wants to raise the corporate tax rate to 28% and impose additional taxes on the rich to fund middle-class initiatives.
The Biden administration has also insisted that tax cuts be paid for as part of a program, whereas Trump’s 2017 revamp resulted in larger budget deficits as anticipated growth did not materialize.
According to recent economic study, Trump’s corporate tax cuts increased business investment, but not by enough to offset the cost of the tax cuts. The Congressional Budget Office estimates that fully extending the expiring tax cuts will cost $4.9 trillion over ten years, including additional debt interest. The federal government’s publicly held debt is over $27.6 trillion.
Business leaders claim that lower taxes help them compete on a global scale. This allows them to hire additional employees and invest in new technology. This, in turn, would promote growth.
BRT members from Cisco and Procter & Gamble told reporters on Wednesday that rising interest rates will lead to less investment in the United States.
P&G’s CEO and board chairman, Jon Moeller, stated that a tax hike would most likely be passed on to customers in the form of increased pricing, limit employee wage increases, and be paid by shareholders.
“Making the assumption that companies are big and strong and they can absorb this, that’s kind of naive in terms of what will actually happen,” Moeller stated. “It’s a societal impact.”
Biden’s budget proposal would increase business taxes by over $2.2 trillion over a decade. More than half of the new income would come from resetting the corporation tax rate to 28%, which is an increase but still lower than the 35% rate Trump inherited according to apnews.com
Meanwhile, Trump has claimed that greater corporate taxes will devastate the country itself.
“Biden wants to raise taxes on top of that and raise business taxes, which will lead to the destruction of your jobs and, you know what, ultimately it’s just going to lead to the destruction of the country,” Trump stated during a rally in May.
