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Biden administration makes pitch for higher business taxes
The Biden administration is drilling down on the argument that higher corporate tax rates would ultimately help an ailing economy, saying the resulting infrastructure investments would boost growth.
Treasury Secretary Janet Yellen said Wednesday it was “self-defeating” for then-President Donald Trump to assume that cutting the corporate tax rate to 21% from 35% in 2017 would make the economy more competitive and unleash growth. Yellen said that competing on tax rates came at the expense of investing in workers.
“Taxe reform is not a zero-sum game,” she told reporters on a call. “Win-win is an overused phrase, but we have a real win in front of us now.”
President Joe Biden last week proposed a $2.3 trillion infrastructure plan that would largely be funded by an increase in the corporate tax rate to 28% and an expanded global minimum tax set at 21%. Yellen said the plan would double-down on investing in workers’ skills and traditional infrastructure such as roads and bridges as well as modern infrastructure such as broadband. The increases would produce roughly $2.5 trillion in revenues over 15 years, enough to cover the eight years’ worth of infrastructure investments being proposed.