Both the Trump campaign and the Biden administration are wooing the business community with rival events on Thursday outlining different promises to American companies if elected.
Both are, in a way, like serving carrots, but with different flavors.
Donald Trump, who is scheduled to meet with a group of prominent CEOs in Washington, DC on Thursday morning, has placed a heavy emphasis on cutting taxes as well as reducing government regulation.
A promise from Biden’s team is that a second term will focus on “public interventions to create a supportive business environment and spur private investment,” as Treasury Secretary Janet Yellen is due to say in a speech to business leaders in New York on Thursday.
It remains to be seen which approach will be accepted by the business community as a whole and the general public.
But many CEOs have indicated they intend to focus on taxes in the coming year, with key provisions of President Trump’s 2017 tax cuts set to expire at the end of 2025.
On Thursday, Trump is scheduled to meet with members of the Business Roundtable, a group of top corporate executives whose current chairman is Cisco (CSCO) CEO Chuck Robbins.
Ahead of the meeting with Trump, Business Roundtable officials laid out detailed tax priorities and announced they were prepared to spend more than $10 million to spread the message that tax reform is necessary for global competitiveness.
It would be the group’s biggest campaign ever, seeking to preserve the current 21 percent corporate tax rate, improve international tax rules and add new incentives for companies to invest in research and development in the United States.
In a back-and-forth with reporters, Business Roundtable CEO Joshua Bolten downplayed some of the less-than-business-friendly ideas, such as President Trump’s determination to impose 10% tariffs on U.S. trading partners.
“We don’t see this as a package deal,” he said. “We believe taxes should be low and that unfair tariffs should not be introduced.”
Biden had been invited to speak at the rally alongside Trump, but he is currently in Italy for the G7 meeting and has sent White House chief of staff Jeff Zients, a former corporate executive, in his place.
Yellen’s message in New York on Thursday is expected to include a whip of some kind as she reiterates Biden’s overall plan to ask business to pay their “fair share” in taxes if he is re-elected.
President Trump’s tax cut message
The plan unveiled by President Trump is centered around extending the 2017 tax cuts that reduced costs for many individuals and businesses. President Trump has promised to extend those cuts and may enact new ones, including a proposed further reduction in the corporate tax rate.
During his visit to Washington, Trump is scheduled to attend a series of private meetings, first with House Republicans, then with CEOs of the Business Roundtable and Republican senators to strategize and rally support on taxes and other issues.
Trump was greeted by protesters as he began his session on Capitol Hill on Thursday morning. According to various accounts given to reporters, Trump first met with House Republicans, touching on a wide range of issues from taxes and tariffs to abortion and the results of recent primary elections.
“Once Mr. Trump gets in, he needs to set a very aggressive agenda for his first 100 days,” House Speaker Mike Johnson said Wednesday ahead of the visit.
Johnson and other lawmakers plan to push an extension of those tax cuts quickly through Congress, using a process known as “reconciliation,” if their party wins a majority in the House, Senate and presidential elections this fall.
This maneuver requires only a simple majority in the Senate, but unified control of government by one party.
The question in Trump’s meeting with CEOs is whether it will follow a similar pattern to his personal pitches in recent months, in which some experts say he has come close to violating campaign finance laws by tying his tax and regulatory plans to campaign contributions.
According to a recent report in the Washington Post, Trump met with oil company executives and told them they should raise $1 billion for his campaign, calling it a “deal” because of the money they could save.
Biden’s pitch
Biden’s new pitch to businesses focuses on strengthening government support for businesses.
With the president in Europe, it will fall to Secretary of State Yellen to deliver that message.
She is scheduled to speak at the Economic Club of New York on Thursday, where she plans to focus on ways to increase government support for businesses in Biden’s second term, while sticking to her position that the tax cuts will likely end.
According to excerpts released in advance, the speech will focus on what she calls “modern supply-side economics.”
“Traditional supply-side economics mistakenly assumes that policies like tax cuts for the wealthy and deregulation will boost overall national growth and prosperity,” Yellen will say.
Her speech will instead lay out a plan for greater cooperation and say “this broad approach will benefit American workers and families, as well as businesses and our entire economy.”
Biden has certainly had notable success in using the power of government to stimulate strategically important sectors.
The CHIPS and SCIENCE Act of 2021 would create a wave of new semiconductor activity, putting the U.S. on pace to produce 20% of the world’s most advanced semiconductor chips a decade from now, administration officials said. The U.S. currently produces 0% of those chips.
And this week, the White House announced that the Electric Vehicle Tax Credit of the Inflation Control Act of 2022 has saved consumers more than $1 billion since it took effect in January.
One question, at least in terms of how CEOs will receive this message, is whether business leaders are only interested in tax issues, where Biden has offered few proposals that would impress them.
“The last thing we want to do is go backwards on the tax front,” Cisco’s Robbins said in a roundtable with reporters this week.
Other speakers at the event also criticized Biden’s plan to raise the corporate tax rate to 28%, saying it would make the United States one of the least competitive business locations in the world.
Trump has pledged to go in the opposite direction, lowering it to 15%.
Biden’s team said that while his message may not be well received among executives, it’s one that will still resonate with voters.
That’s a point underscored in a new White House memo released Thursday, with President Biden’s top economic adviser, Lael Brainard, noting that Trump’s tax cut pledge doesn’t include a plan for how to pay for it.
She wrote that Trump would balance the budget “by passing the burden onto hardworking Americans by taxing household purchases, slashing Social Security and other programs they rely on, and inflating the national debt.”
Brainard argued on a conference call with reporters that this is a winnable issue and that “the president is standing firm when he talks about tax fairness” because people don’t believe billionaires and big corporations pay enough in taxes.
Ben Warschle is Washington correspondent for Yahoo Finance.
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