Treasury Secretary Janet Yellen on Tuesday attempted to drum up support among business owners for President Joe Biden’s plans for infrastructure investments and tax increases.
Speaking at a U.S. Chamber of Commerce event, Yellen argued that the Biden proposals would benefit American companies and make them more competitive internationally. “We are confident that the investments and tax proposals in the jobs plan, taken as a package, will enhance the net profitability of our corporations and improve their global competitiveness,” Yellen said. “We hope that business leaders will see it this way and support the jobs plan.”
Biden has proposed spending upwards of $2.3 trillion on a wide variety of projects, ranging from standard items like highways and bridges to more wide-ranging issues such as job training, eldercare and green energy. To help pay for those investments, Biden has also proposed a package of tax hikes, including an increase of the corporate tax rate from 21% to 28% and a new minimum tax on foreign earnings, as well as a crackdown on tax cheats by the IRS.
In her pitch, Yellen asked businesses to contribute more to government spending than they have in recent years. “With corporate taxes at a historical low of one percent of GDP, 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,” she said.
Yellen also spoke about the lack of power of workers in the U.S. and the effect that has had on economic inequality. “Workers, particularly lower-wage earners, have seen wage growth stagnate over several decades, despite overall rising productivity and national income,” she said. “There are several contributors to this troubling trend, but one important factor is an erosion in labor’s bargaining power.”
A chilly response: While expressing support for new investment in infrastructure, Suzanne Clark, who leads the chamber, said the organization opposes raising taxes to pay for it. “The data and the evidence are clear: the proposed tax increases would greatly disadvantage U.S. businesses and harm American workers, and now is certainly not the time to erect new barriers to economic recovery,” Clark said in a statement. “The administration is right to champion infrastructure, and we want to be there with them to do that, but there are other ways to finance it.”
