Biden Infrastruture Package: CEOs Voice Opposition To Democrats' Tax Hike To Pay For $3.5 Trillion Bill

A top Washington-based business lobbying group on Tuesday expressed their opposition to President Joe Biden's proposed tax hike that would fund a $3.5 trillion infrastructure bill.

The Business Roundtable (BRT), which formed in 1972 and meets to discuss public policy issues, counts some of the nation’s top chief executives among its members. In a survey conducted by the group, CEOs listed tax increases together with the ongoing labor shortage and a slowdown in the COVID-19 vaccination campaign as the biggest risks to growth. Among these problems, the potential tax hikes drew the most forceful rebukes.

In a video posted to their Twitter account, BRT members shared their thoughts on how a corporate tax hike would lead to lower competitiveness worldwide for U.S. firms. Each speaker made the case that earlier tax cuts were necessary to improve investments in their operations and workforce while warning that a hike would make U.S. companies less capable of keeping up with firms from other countries like China.

BRT President and CEO Joshua Bolten captured this apprehension among the executives by labeling the possible hike as "one of the largest corporate tax increases in history." He added that the "tax on job creators" would harm competitiveness worldwide and weaken investment at home.

“Increasing taxes on America’s largest job creators by almost $1 trillion - nearly three times the net corporate tax cut from 2017 tax reform -would be one of the largest corporate tax increases in history,” said Bolten.

“The country needs businesses to invest in workers, innovation and operations to strengthen the U.S. economy, not new taxes that would weaken it. We urge policymakers to reverse course,” he added.

Under the Democrats' proposal, there would be a number of new changes to the nation's tax code for high-income earners and corporations. If passed, the corporate tax rate would rise to 26.5%, which is higher than the 21% rate introduced under former President Donald Trump. It would however remain lower than the pre-2017 tax rate of 35%.

Individual rates would rise to 39.6% with a 3% surcharge on those making $5 million or more. A 25% capital gains tax would also be introduced with the spending bill.

The Biden administration has also hoped to expand the amount high-income Americans pay in taxes. Last week, Biden said he was "sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes."

On Sept. 8, the Treasury Department released a report that showed how the top 1% of earners in the U.S. are dodging $168 billion in taxes annually. The administration used the report to make the case for increased enforcement powers for the IRS to collect trillions in taxes that they say will fill the "tax gap."

The independent Congressional Budget Office noted that Biden’s proposals for enhanced enforcement would not rake in as much as its own projections show.