As the Biden administration pitches its $2 trillion infrastructure proposal and the corporate tax hike that would fund it, Commerce Secretary Gina Raimondo has become the team’s unofficial CEO whisperer.
Raimondo, a former Rhode Island governor who previously worked in venture capital, says she’s talked to “dozens and dozens of CEOs” about the proposal to raise the corporate tax rate from 21% to 28%.
She says when all is said and done, corporate America might not be as universally opposed to a hike as it might seem after Congress lowered the tax rate from 35% to 21% back in 2017.
“Many, many, many CEOs felt that 21% was too low, lower than they expected,” she told Yahoo Finance's editor-in-chief, Andy Serwer, on Thursday.
The Commerce Secretary added that many of the CEOs wouldn’t oppose an increase under one condition: “If the money were to be used for investments that improve our competitiveness, like in broadband, in research and development, in roads, bridges, water, airports."
While plenty of business groups like the U.S. Chamber of Commerce and Business Roundtable have offered opposition to the plans for a corporate tax increase to 28%, some business leaders have supported an increase above the current level of 21%.
During Yahoo Finance’s All Markets Summit in October, former Goldman Sachs president and COO Gary Cohn said he’d be comfortable with the corporate tax rate moving back up no higher than 28%. When he served as former President's Donald Trump's chief economic adviser, Cohn was central in crafting the Tax Cuts and Jobs Act of 2017 that lowered the corporate tax rate all the way down to 21%.
Still, Cohn said, “21% to me was the lower end of where we needed to be.”
Another architect of the 2017 tax cuts, House Ways and Means Committee Ranking member Kevin Brady, says rates should stay where they are, though. "I think it's a major economic blunder to raise taxes on job creators as we're urging them to hire more Americans," he told Yahoo Finance this week.
For her part, Raimondo acknowledged that business leaders might not "love" the 28% proposal but said she believed a middle ground was possible. While Raimondo declined to specify where that middle ground might lie, Sen. Joe Manchin, a Democrat from West Virginia who's a must-have vote for the proposal to pass, has said that he favors a 25% rate.
'She likes talking to businesses'
Raimondo has long had a reputation as a one of the most business-friendly Democrats. In January, in the middle of her confirmation hearings, Ravi Kumar, president of Infosys (INFY), a global business consulting and IT company with a hub in Rhode Island, sang her praises in interview with Yahoo Finance.