Tax Showdown Looms as Biden, Trump Vie for CEO Support
As the 2024 presidential race heats up, a high-stakes battle is brewing over corporate taxes, with President Joe Biden and his potential Republican challenger, former President Donald Trump, vying for the support of America's top CEOs.
At a closed-door meeting with the influential Business Roundtable in Washington, Biden's chief of staff, Jeffrey Zients, made a compelling case for the incumbent's emphasis on global alliances and independent institutions like the Federal Reserve. Zients argued that these factors foster the trust worldwide that allows U.S. capitalism to thrive – a veiled jab at Trump's previous tariff wars and attempts to exert control over the Fed.
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Zients also highlighted the Biden administration's collaboration with businesses on issues like supply chains, claiming this cooperation enabled the post-pandemic economic recovery. He warned that Trump's pledges to deport millions and potentially wage trade wars could drive up inflation.
Meanwhile, the Business Roundtable announced a $10 million-plus campaign to preserve the corporate tax rate at 21% – a cornerstone of Trump's 2017 tax cuts. The group aims to promote business-friendly changes to the tax code and extend incentives for research and development.
The looming expiration of Trump's tax cuts after 2025 sets up a showdown between the parties over how to rewrite the tax code. While both sides want to preserve cuts for those making under $400,000, Trump backers seek to expand them, including for companies. Biden, on the other hand, proposes raising the corporate rate to 28% and introducing higher taxes on the wealthy to fund programs for the middle class.
The debate underscores the divergent economic visions at play. Business leaders argue that lower taxes make them more competitive globally, enabling them to hire more workers and invest in new technologies – ultimately boosting growth. However, recent research suggests that Trump's corporate tax cuts did boost investment but not enough to cover their cost, exacerbating budget deficits.
As Biden and Trump potentially gear up for a 2020 rematch, the tax debate emerges as a crucial economic issue. With CEOs wielding significant influence, both camps are jockeying to win over the Business Roundtable and shape the narrative around corporate taxes and their impact on jobs, investment, and the broader economy.