The big picture: Biden wants to fund his American Jobs Plan by raising the corporate tax rate from 21 percent to 28 percent, and some tech companies — most notably Amazon, Facebook, and Google — have already shown support the increase. Other organizations are not so keen on the idea and argue that it would only hurt existing jobs and the competitiveness of American companies.
Earlier this month, President Joe Biden publicly criticized Amazon and 90 other companies that pay little or no federal income tax despite earning a significant profit. He also promised to put an end to the practice and close a loophole in the tax code that allows big tech companies to shift their profits overseas.
Biden proposes an increase in corporate tax rate from 21 percent to 28 percent, which would help fund his ambitious $2 trillion infrastructure plan. This is a bold, two-part package of measures that are expected to improve the country’s aging roads, bridges, ports, airports, and transit systems, bring broadband access to rural areas, create more affordable housing, develop clean energy infrastructure, revitalize American manufacturing, and fund training and schooling for non-college graduates.
Interestingly, Amazon CEO Jeff Bezos showed his support for the idea through a public statement on Twitter, and noted the company recognizes the need for “concessions from all sides — both on the specifics of what’s included as well as how it gets paid for.”
This week, a tech industry group called the Chamber of Progress — which is funded by companies like Amazon, Google, Facebook, Uber, Twitter, Lime, Waymo, and DoorDash — revealed its support for the increase in corporate tax rate. In the official announcement, the group described it as a “deal” the tech industry can support, and expressed its agreement with Treasury Secretary Janet Yellen, who recently wrote that “by choosing to compete on taxes, we’ve neglected to compete on the skill of our workers and the strength of our infrastructure. It’s a self-defeating competition.”
That doesn’t mean that all companies are happy about Biden’s proposal, as a different organization called the Business Roundtable was quick to push back against the idea by arguing that any tax increase would hurt American companies’ ability to compete on the global market. Joshua Bolten, who presides the Business Roundtable, notes that regulators should “avoid creating new barriers to job creation and economic growth, particularly during the recovery.”
Some speculate that Amazon’s support for the increase in corporate tax rate (and for that matter, that of the other member companies of the Chamber of Progress) is that it stands to benefit greatly from Biden’s infrastructure plan and would see little impact on its bottom line. However, Chamber of Progress founder and CEO Adam Kovacevich says the tech industry group’s reasoning is more rooted in the idea that a better infrastructure is conducive to more opportunities for everyone.