U.S. Transportation Secretary Pete Buttigieg is in agreement with his colleagues inside the Biden administration: Corporations need to pony up to help build America's infrastructure of the future.
"Well, I think that an honest look at corporate America will tell you that they can do more to pay their fair share. Look, remember we are calling for a tax rate of 28%. For most of my lifetime that rate stood at 35% and American companies were perfectly competitive, extremely competitive. So if we can handle 35%, I am pretty sure we could handle 28%," Buttigieg told Yahoo Finance Presents.
President Biden unveiled his $2.3 trillion infrastructure plan last week.
Coined the "American Jobs Plan," Biden's proposal aims to invest $621 billion into transportation infrastructure, including the repair of roads, bridges, transit and rail. More than $300 billion will be spent to replace lead water pipes and upgrade sewers, invest in broadband access and improve the power grid.
The infrastructure plan is seen as being mostly paid for by lifting the corporate tax rate to 28% from 21%.
Since the release of the plan, intense debate has erupted inside of corporate America on having to foot the bill for overdue infrastructure investments. While most CEOs Yahoo Finance have spoken with support the need for better roads, bridges, tunnels and infrastructure in general they are loath to put their profits at risk.
A good example of the mood inside the C-suite has spilled out into a public forum, too.
"We support the Biden administration's focus on making bold investments in American infrastructure," Amazon founder and CEO Jeff Bezos said in a statement Tuesday. "Both Democrats and Republicans have supported infrastructure in the past, and it's the right time to work together to make this happen. We recognize this investment will require concessions from all sides — both on the specifics of what's included as well as how it gets paid for."
Bezos stopped short of supporting Biden's 28% corporate tax rate.
Meanwhile, Raytheon Technologies CEO Greg Hayes predicted a $1 billion blow to profits from the change to the tax code. Hayes — chairman of the Business Roundtable's tax and fiscal policy committee — made the comments in an interview with Carlyle's co-founder David Rubenstein.
Buttigieg said the Biden administration is pretty firm on the 28% corporate tax, but they are open to other ideas from corporate America on how to pay for the plan.
"As the president has said this is the beginning of the legislative process — of course there's going to be a push and pull. There's going to be adjustments, improvements, compromises and negotiations. But what I will say is this vision that the president put forward last week is very fully articulated — it's strong, it's pretty hard to beat, in my view, especially because these improvements are fully paid for over 15 years," Buttigieg explained. "By year 16, they are actually reducing the deficit with this jobs plan too. So I think it's a great plan. But if others have ideas, offered in good faith, on how to make it better, you're going to find a lot of willingness to listen. What we can't do is wait forever because each passing day, our infrastructure gets in worse and worse shape."
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