Donald Trump aims to entice CEOs with lucrative tax cuts while Biden wants to win them over by vowing to maintain stability
Former President Donald Trump told an influential group of CEOs that he wants to lower the corporate tax rate he cut while in office, while President Joe Biden's chief of staff separately told them that the Democratic incumbent's focus on global alliances would help their businesses.
both of them Trump, the presumptive Republican nomineeJeffrey Zients met behind closed doors on Thursday at a business roundtable in Washington, where Zients replaced Biden during… President's meetings with the G7 Leaders in Italy. The prominent group representing more than 200 executives has made efforts to preserve the corporate tax breaks that Trump signed into law in 2017.
Neither side has commented publicly on what was said at the meeting, which comes as Biden and Trump head toward a rematch in 2020 with starkly different views on taxes and the economy.
Trump said he wanted to cut the corporate tax rate by a percentage point to 20%, according to a person familiar with his remarks who insisted on anonymity to discuss the closed-door meeting. The source said that the former president focused his statements on taxes, inflation, and the need for more oil production.
Another person familiar with the talks said Zients made clear that America's global reputation and its independent institutions like the Federal Reserve fostered the kind of trust around the world that allowed American capitalism to flourish. The comments were a criticism of Trump's camp, as the former president had previously hit allies with tariffs and sought greater control over Fed policies.
Zients said the post-pandemic economic recovery was possible in part because the Biden administration worked with companies on issues such as supply chains. He noted to the CEOs that Trump's pledges to deport millions of people and launch potential trade wars could lead to higher inflation. The person also insisted on anonymity to discuss the details of the meeting, as he was not authorized to do so publicly.
The Business Roundtable has made low taxes a top legislative priority. The group announced it will spend at least $10 million on a campaign to keep the corporate tax rate at 21% as well as promoting business-friendly changes to the US tax code and pushing to expand tax incentives for research and development.
Part of the 2017 tax cuts that Trump signed into law while the president's term expires after 2025, and will likely result in higher taxes on most American households. This leads to a confrontation between Democrats and Republicans over how to rewrite the tax code.
Leaders from both parties want to preserve the cuts for those making less than $400,000. But some Trump supporters want to expand the tax cuts, including for corporations. Biden wants to raise corporate interest rates to 28% and impose higher taxes on the wealthy to finance programs intended for the middle class.
The Biden administration also asserted that tax cuts would have to be paid for as part of the proposal, while the 2017 overhaul approved by Trump sent the budget deficit soaring as promised growth did not materialize.
Modern economic research He points out that Trump's corporate tax cuts boosted business investment, but not enough to generate the additional growth needed to cover the cost of those tax cuts. The Congressional Budget Office estimates that a full extension of the expiring tax cuts would cost $4.9 trillion over ten years, including additional interest on the debt. The federal government's public debt is about $27.6 trillion.
Business leaders claim that lower taxes make them more competitive globally. This enables them to hire more workers and invest in new technologies. This, in turn, would help promote growth.
BRT members Cisco and Procter & Gamble told reporters on Wednesday that higher interest rates will make them invest less in the United States.
The tax increase will likely be passed on to consumers in the form of higher prices, limiting wage growth for employees and passed on to shareholders, said John Mueller, CEO and chairman of Procter & Gamble.
“Assuming that companies are big and powerful and can absorb this is kind of naive about what will actually happen,” Mueller said. “It's a societal impact.”
Biden's budget proposal would raise corporate taxes by about $2.2 trillion over 10 years. More than half of this new revenue will come from resetting the corporate tax rate to 28% – an increase, though still lower than the rate Trump inherited (35%).
At the same time, Trump suggested that raising corporate taxes would destroy the nation itself.
“Biden wants to raise taxes on top of that and raise business taxes, which will destroy your jobs and, you know, ultimately destroy the country,” Trump said at a rally in New York City. maybe.
