“It still remains to be seen whether the Biden administration is good or bad for business.”
That was Josh Bolten, president of the Business Roundtable, at a meeting on Wednesday with reporters. The influential corporate lobbying arm, as it turns out, is trying to help answer the question by blocking the president’s proposals to tax Big Business more aggressively.
These proposals, the roundtable has argued publicly for months, would be bad for business and the broader U.S. economy. How so? They would discourage investment at home and give an advantage to rivals abroad, making American companies less competitive.
“They could produce a product more cheaply overseas and import it to the United States more cheaply than we can,” produce it here, Bolten said about foreign rivals.
It’s a time-old argument of the private sector, of course, but not an unreasonable one given a fiercely competitive global economy.
The president’s nearly $2 trillion “Build Back Better” plan would be paid in large part by higher taxes on big companies. The Roundtable estimates the plan includes some $800 billion in new levies on corporations.
There are two provisions that businesses particularly dislike. One called GILTI — Democrats choose the acronym for a reason — would put a 15% minimum tax on profits that companies earn abroad.
The second would be the corporate equivalent of the alternative minimum tax on individuals. Companies effectively would not be able to reduce their taxes below a certain threshold regardless of how much they invested.
Altogether, these corporate tax increases could end up being twice as large as the tax cuts businesses received in 2017 under then-President Trump, Bolten contends.
The roundtable has been working behind the scenes with lawmakers and buying lots of ads in the Washington region to get its point across to the public. “We are spending a comparable amount,” Bolten said.
Bolten doubled down on the roundtable’s opposition during the group’s first in-person meeting with reporters since the start of the pandemic at its posh office overlooking the city waterfront.
Under polite but skeptical questioning, Bolten acknowledged the roundtable is operating on a “narrow playing field” in a “peculiar political environment.”
By that he meant an usually small number of senators are open to the group’s arguments compared to prior issues on which the roundtable has weighed in. Bolten should know. He once dealt frequently with Congress as the chief of staff to President George W. Bush.
The fate of Biden’s expensive gambit, he suggested to no one’s surprise, rests on a pair of Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Both have balked at some of the proposed taxes and spending plans.
Manchin has been the most resistant to Biden’s Build Back Better plan and the roundtable had him as a guest at one of their events earlier in the year. He could end up deciding if the bill lives or dies in a Senate split 50-50 between Democrats and Republicans.
Bolten was not entirely critical of the Biden White House. The roundtable supported the recently passed $1 trillion law to upgrade the U.S. infrastructure. And it supports White House efforts to beef up the IRS to crack down on tax cheats.
The roundtable also backed the administration’s effort to levels the playing field on taxes through talks with other wealthy nations that are part of the Organization for Economic Development.
Yet Bolten was skeptical that other nations would give up any tax advantages over the United States. The U.S. should not give them any further advantage, he said, especially with the nation recovering from the pandemic and inflation soaring.
“Bad tax policy exacerbates economic risk,” he said.