U.S. lobby groups write battle plan to beat Biden tax hikes

U.S. business lobbying groups cheered a bipartisan $1.2 trillion infrastructure deal, but are gearing up to fight the corporate tax hikes looming in a separate but linked spending bill that Democrats aim to pass without Republican votes.

The U.S. Chamber of Commerce, the National Association of Manufacturers, the National Retail Federation and other deep-pocketed lobby groups plan to use the same argument they employed in 2017 to secure huge tax cuts from Republicans: higher corporate taxes equal fewer jobs.

"We don't know what's in that package," Rachelle Bernstein, chief tax counsel for the retail group, said of the Democrats' "reconciliation" bill expected to contain new social spending and tax hikes.

"But we don't think it is good to use a corporate tax increase to finance spending," said Bernstein, whose group has spent $1.5 million on lobbying in the first quarter of 2021, according to watchdog OpenSecrets.org.

The Biden administration's pitch for reducing U.S. economic inequality and competing more effectively with China relies on using tax hikes on corporations and wealthy Americans to pay for some $4 trillion in new spending on transportation, communications, research, renewable energy, childcare, housing, education and healthcare.

Treasury Secretary Janet Yellen in May laid out to the U.S. Chamber of Commerce her argument that such productivity-enhancing investments, paid for in part with a corporate tax increase to 28% from 21%, would still boost corporate profits.