U.S. CEOs are concerned that raising the corporate tax rate could negatively affect the competitiveness of U.S. companies and may ultimately backfire on shareholders and employees.
In a statement on Tuesday, Business Roundtable Tax and Fiscal Policy Committee Chair Gregory Hayes, who is also the CEO of Raytheon, said raising the corporate tax rate would "have significant adverse effects on hiring and investment plans" while also likely affecting economic growth.
"We urge policymakers to seize the opportunity at hand and compromise on a bipartisan infrastructure package for the benefit of American workers and families," Hayes said.
The Business Roundtable said increasing the corporate tax to 28% from 21%, as proposed by President Biden to pay for spending initiatives, would undermine the competitiveness of U.S. companies and would ultimately be borne by shareholders and company employees.
Ninety-eight percent of participants said the tax hike would have moderate to significant effect on their company’s competitiveness, a previous survey conducted by the group found. Two-thirds of CEOs said it could slow wage growth for employees.
When it comes to the global minimum tax, which Biden promoted alongside the Group of 7 finance ministers over the weekend, Hayes noted that not all countries around the world have the same infrastructure to support business opportunities as the U.S. and therefore sometimes use lower tax rates as an incentive.
He said it would, however, be beneficial for U.S. multinationals to have a consistent global tax regime.
The Business Roundtable released its second quarter CEO Economic Outlook on Tuesday, detailing record hiring plans. Three-quarters of participants said conditions for their companies have either already recovered, or would recover to pre-pandemic levels by the end of the year.
CEOs also projected a 5% growth rate for the year, which is higher than what they estimated in the first quarter.
FOX Business’ Jennifer Schonberger contributed to this report.