Business groups in the U.S. have teamed up to oppose the Biden administration’s proposed tax increases.
The proposed increases are two-fold. Firstly, there is the impending global minimum corporation tax, which is designed to stop businesses from shifting profits overseas for tax purposes. On top of this, there is the proposed increase in the U.S. to pay for infrastructure spending.
The coalition has been formed just as the White House seeks to pass a $1.3 trillion infrastructure package. If approved, the package will provide billions of dollars to be plowed into projects like eliminating lead water pipes and installing infrastructure such as charging points for electric vehicles.
President Biden is promoting the bill as the most ambitious public spending plan for decades. The White House claims that the investments are essential to keep the economy growing and retain American competitiveness in global markets, in particular with regards to China.
The business coalition claims tax increases will stall recovery
The alliance, led by the National Association of Wholesale Distributors, claims that although the package has undoubted benefits, increasing taxes on businesses will stall any economic recovery.
The association’s President and Chief Executive, Eric Hoplin, said – “The record tax hikes that Democrats are seeking to ram through could not come at a worse time for America’s job creators who are just beginning to recover from a crippling pandemic. Employers support smart infrastructure to ensure America’s 21st-century competitiveness, but it shouldn’t be used as a Trojan horse to enact record high taxes on America’s individually and family-owned businesses.”
Amongst the 28 industry groups that have teamed up to form the alliance are the American Rental Association, Wine and Spirit Wholesalers of America, American Hotel and Lodging Association, National Grocers Association, and the Auto Care Association.
The group says it expects to add more members in the coming weeks and will conduct further research on the impact of the tax proposals.
A spokesman for the group said that while they acknowledged that the infrastructure bill has strong support, it quickly becomes unpopular when you talk about the impact of taxes on job creators.
Chris Smith, of the Main Street Employers Coalition, added – “The pandemic has taxed individually and family-owned businesses enough – taxing them again while they are still struggling to recover just goes too far.”
Treasury Secretary Janet Yellen received a mixed response to a speech she gave to the U.S. Chamber of Commerce earlier this month, during which she pitched the idea of higher taxes to pay for infrastructure investment.
She said that corporation taxes in the U.S. were at a historic low and that the proposed hike would raise them from 21% to 28%. She added that – “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.”
The Chamber of Commerce had previously called the infrastructure plan “dangerously misguided.”
The group said – “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.”
Some business leaders, including Amazon boss Jeff Bezos, have come out in favor of the increase. This despite facing heavy criticism of the level of taxes they pay in the U.S.
