US Treasury Secretary Yellen pitches corporate tax hike to biz skeptics

US Treasury Secretary Janet Yellen is urging a sceptical business community to support corporate-tax increases to help pay for the administration’s proposed $2.25 trillion investment in the nation’s infrastructure, touting greater profits.

In a speech to the US Chamber of Commerce Tuesday, Yellen will argue that the Biden administration’s proposals, “taken as a package will enhance the net profitability of our corporations and improve their global competitiveness,” according to the text of her prepared remarks. “We hope that business leaders will see it this way and support the Jobs Plan.”

The chamber is among the business lobbies that have backed President Joe Biden’s proposal to ramp up spending on infrastructure, but are strongly opposed to raising the corporate income tax rate to pay for it. The plan calls for the rate to increase to 28 per cent from 21 per cent. The chamber, along with the Business Roundtable, instead want to see a user-fee model for raising money for the plan. In her speech, Yellen will lay out a stark contrast between American innovation and power and its degrading highways, airports and bridges, along with economic inequities driven by rising wages “at the top,” and stagnation among the middle class.

Biden’s proposal, called the American Jobs Plan, will help those who feel “left behind,” by boosting wages and productivity, Yellen says. Biden's proposal goes well beyond traditional infrastructure such as road and bridges and proposes to invest in broadband networks, research and development, modernised schools and expanding child care to bring more women into the workforce.

Yellen said that the package will "make up for lost time" in investing in renewable energy technologies and protecting against cyber threats. 

"The transition to a greener economy will provide a multi-decade boost to the economy, creating jobs along the way as the private sector participates in the development of new technologies, new investments, and the new products that will drive the global economic transformation."

Yellen also said Biden's American Families Plan will enhance education from early childhood to community college to help build a competitive workforce and fight childhood poverty.

She also said that in the areas of trade and investment, the Biden administration will fight for a level playing field and "confront adversaries who take advantage by ignoring or abusing rules and norms of behaviour.”