Former Federal Reserve Chairman Janet Yellen speaks during a panel discussion at the American Economic Association/Allied Social Science Association (ASSA) (Photo : REUTERS/Christopher Aluka Berry/File Photo)
U.S. Treasury Secretary Janet Yellen tried to sell President Joe Biden's $2.2 trillion corporate tax hike and infrastructure plans to the U.S. Chamber of Commerce on Tuesday, saying that the proposals will improve the profitability and competitiveness of American corporations.
Yellen told a Chamber online conference that the "American Jobs Plan" infrastructure investments would have a direct payoff to the American people, create jobs and simply "return the corporate tax rate toward historical norms."
"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. We hope that business leaders will see it this way and support the Jobs Plan," she said.
Yellen is taking her pitch for Biden's tax and spending plans directly to an organization that is deeply opposed to raising the corporate tax rate, which was cut to 21% from 35% by the Trump administration and Republicans in Congress in 2017. Biden is proposing to raise the rate to 28%, while negotiating a global minimum corporate tax with major economies.
CHAMBER NOT PERSUADED
Chamber CEO Suzanne Clark said after Yellen's remarks that tax hikes would erect a barrier to economic recovery from the COVID-19 pandemic.
"The data and the evidence are clear, the proposed tax increases would greatly disadvantage U.S. businesses and harm American workers," said Clark, who took over leadership of the influential business lobby group in March.
"The administration is right to champion infrastructure, and we want to be there with them to do that, but there are other ways to finance it," she added.
The Chamber has favored more traditional means of infrastructure financing, such as increased fuel taxes and other user fees.
Biden's proposal goes well beyond traditional infrastructure such as roads and bridges and proposes to invest in broadband networks, research and development, modernized schools and expanded child care to bring more women into the workforce.
Yellen said that the package will "make up for lost time" in investing in renewable energy technologies and protecting against cyber threats.
"The transition to a greener economy will provide a multi-decade boost to the economy, creating jobs along the way as the private sector participates in the development of new technologies, new investments, and the new products that will drive the global economic transformation."
Yellen also said Biden's American Families Plan will enhance education from early childhood to community college to help build a competitive workforce and fight childhood poverty. The plan would be financed by increases in tax rates for the wealthiest Americans and higher capital gains taxes for those earning more than $1 million a year.
She also said that in the areas of trade and investment, the Biden administration will fight for a level playing field and "confront adversaries who take advantage by ignoring or abusing rules and norms of behavior".
