Will Biden's Proposed Tax Hikes Prevent Companies From Hiring?
A recent survey reveals that most CEOs don't agree with the president's plan to increase the corporate tax rate.
Yesterday, the nonprofit lobbying group — which represents nearly 200 CEOs from American companies, including Apple, 3M and Lowe's — released the study's results. Perhaps unsurprisingly, a significant number of the 178 CEOs questioned between March 8-19 believe that increases in U.S. domestic and international tax rates would, per the organization's press release, "have a negative effect on business expansion, hiring and wage growth, investments in research and development (R&D) and innovation, and U.S. competitiveness in the global economy."
Related: 6 Tips for Hiring the Right People
Approximately 98% of respondents said that an increase in the corporate tax rate from 21% to 28% would have a "moderately" to "very" significant adverse effect on their businesses' competitiveness. About 71% of those same respondents said that a hike would affect the number of people they could hire, and two-thirds believed that it would slow wage growth. A majority of the respondents (75%) additionally said that the increase would negatively impact investments in R&D.
"The proposed tax increases on job creators would slow America’s recovery and hurt workers," the organization's president Joshua Bolten said in a statement. "This survey tells us that increasing taxes on America’s largest employers would lead to a reduced ability to hire, slower wage growth for workers and reduced investments in research and development — all key components needed for a robust economic recovery. When U.S. companies can compete around the world, they can invest in America and help generate more jobs, pay higher wages and support all of their stakeholders."
Biden is hoping to increase the corporate tax rate to help fund his $2 trillion infrastructure and jobs plan, although he faces fierce opposition from Republican lawmakers. An increase would repeal changes to the corporate tax code made under former President Trump's Tax Cuts and Jobs Act in 2017.
Justin Chan is a news writer at Entrepreneur.com. Previously, he was a trending news editor at Verizon Media, where he covered entrepreneurship, lifestyle, pop culture, and tech. He was also an assistant web editor at Architectural Record, where he wrote on architecture, travel, and design. Chan has additionally written for Forbes, Reader's Digest, Time Out New York, HuffPost, Complex, and Mic. He is a 2013 graduate of Columbia Journalism School, where he studied magazine journalism. Follow him on Twitter at @jchan1109.