It didn’t go over well.
Ms. Yellen‘s call to “fundamentally reform” the corporate tax system to pay for infrastructure spending was bookended by comments from Chamber President and CEO Suzanne Clark pushing back against higher tax rates.
“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,” Ms. Yellen said in remarks aired Tuesday as part of the Chamber’s Global Forum on Economic Recovery. “And we hope business leaders will see it this way and support the jobs plan.”
Ms. Yellen said that with corporate tax rates at a historic low, companies can afford to bear their “fair share” of taxes.
Mr. Biden wants to increase the U.S. corporate tax rate from 21% to 28%, among other changes, reversing the cut from 35% in the 2017 GOP tax law.
The tax hikes are intended to fund part of the president’s more than $2.25 trillion infrastructure plan.
The Chamber of Commerce and other major business lobbying groups say they support boosting investments in infrastructure but that lifting the corporate tax rate would stifle growth at a precarious time for the economy.
“That’s why the Chamber is fighting back against proposals such as raising corporate tax rates to the highest in the developed world, which would disincentivize … investment,” she said.
She said afterward that it’s always an honor to hear from the treasury secretary, including on areas of disagreement.
“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,” Ms. Clark said.
The comments indicate that Mr. Biden will have a difficult time getting major corporate buy-in on his $4 trillion-plus economic agenda if he presses to pay for the new spending with higher taxes.
Other major business groups, such as the Business Roundtable and the National Association of Manufacturers, have raised similar concerns about the negative effects increasing taxes would have on the economy right now.
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