ICYMI: Business Roundtable Leaders Detail Need for Bipartisan Infrastructure Package, Competitive Tax System

Q2 CEO Economic Survey Shows ‘Economy Is Back on Track,’ Policies Key to Bolstering Economic Recovery, Sustained Growth & Jobs

Business Roundtable yesterday released its Q2 2021 CEO Economic Outlook Survey, which signaled that the U.S. economy is back on track and revealed record plans for hiring in the wake of the COVID-19 pandemic. During a media briefing on the survey results, Roundtable President & CEO Joshua Bolten and Gregory Hayes, Chairman & CEO of Raytheon Technologies Corporation and Chair of the Business Roundtable Tax and Fiscal Policy Committee, discussed the economic outlook and urged lawmakers to advance policies that will bolster the recovery and generate sustained growth and jobs. Chief among those policies is a bipartisan package that invests in our nation’s transportation, water, energy and communications infrastructure. Bolten and Hayes also cautioned against policies that would stall the recovery, including anti-competitive tax increases on U.S. job creators.

On the Economic Benefits of Infrastructure Investment

  • Bolten: “A bipartisan infrastructure package will accelerate the recovery and generate sustained growth and jobs. And is the only way to achieve sustainable policy changes that would allow for long-term funding certainty, enable responsible regulatory streamlining and unleash private capital.”
  • Hayes: “Infrastructure is the key to long-term economic growth. It is also the key to prosperity and to workers’ growth in wages across this country.”

On Bipartisan Infrastructure Negotiations

  • Bolten: “While we’ve seen ups and downs in the negotiations between the White House and Congress, we remain optimistic that Members on both sides of the aisle and the Administration can craft a bipartisan bill that meets the needs of the economy and has real benefits for working Americans. We’re pushing hard to encourage lawmakers to seize the opportunity.”
  • Hayes: “We very much support the bipartisan efforts we’ve seen in Congress of late to come to a reasonable solution around how much we can afford to invest in infrastructure.”

On the President’s Proposed $2.3 Trillion Tax Hike

  • Bolten: “We’re opposed to massive tax increases on U.S. business, as a pay-for or otherwise. Altogether, the more than $2 trillion proposed tax increases would raise the corporate tax burden by roughly seven times more than the amount of the net tax cut corporations received from the 2017 tax reform.”
  • Hayes: “As a large U.S. taxpayer, obviously we’ve got skin in the game. … The 2017 Jobs Act tax cuts cut the tax bill of U.S. corporations by about $330 billion over a 10-year period … This latest proposal by the Biden Administration, raising the rates from 21% to 28% and raising the international rates from 10 and a half to 21%, would put a burden of $2.3 trillion on U.S. corporations over the next decade.”

On the Real-World Impacts of Massive Tax Increases

  • Hayes: “Raytheon, if you think about us today, we’re about 180,000 people. We invest roughly $8 billion a year in R&D. We invest another $2 billion a year in capex. So, $10 billion. The tax increase the Biden Administration has proposed would take our tax bill up by about $1 billion a year. That means something’s got to give, whether that’s R&D, whether that’s capex.”
  • Bolten: “The proposed increases would not only undermine the competitiveness of U.S. companies, but would also hit employees, customers and shareholders who would bear a large portion of tax increases. Often lost is the fact that a lot of shareholders are ordinary Americans who invest through their 401(k) plans.”

On the Long-Term Costs of Tax Uncertainty

  • Hayes: When we brought United Technologies and Raytheon together a year and three months ago, we had some big plans to make investments here in the U.S. And in fact, we’re spending almost $1 billion in North Carolina to build a state-of-the-art manufacturing facility up in Asheville. … So, when we made this decision to invest nearly $1 billion down in North Carolina a year ago, it was under the assumption that we were going to have a 21% tax rate here in the U.S.
  • “… It certainly gives us pause as we think about that next big billion-dollar investment we’re going to have to make. … Tax policy under the ’17 Act really did drive investment here in the U.S. And this uncertainty, I think is a dilemma for many of us, as we think about the next five, 10, 15 years because we have long-cycle businesses. These jet engines, these radars, they last 30, 40, 50 years in service.”

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Business Roundtable is an association of CEOs of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.