From WSJ: Executives at American companies are bracing for higher taxes following the unveiling of President Biden’s $2.3 trillion infrastructure plan, which is proposing to raise the corporate tax rate to 28% from 21%, and increase taxes on companies’ foreign earnings.
The proposed tax changes would overhaul or replace much of the international tax structure that came with the 2017 Tax Cuts and Jobs Act. Companies are also weighing potential implications of the global minimum tax for multinational corporations that Treasury Secretary Janet Yellen floated earlier this month.
Here is what chief executives and chief financial officers are saying about the tax plan.
FedEx Corp. CEO Fred Smith:
“FedEx fully supports the rebuilding of American infrastructure. However, the current corporate tax proposals in the administration’s plan will reduce capital investment and significantly degrade U.S. competitiveness. […] We believe investments in infrastructure—roads, highways, bridges, ports, airports, and waterways—should be financed by users like FedEx.” (April 12)
DuPont de Nemours Inc. CFO Lori Koch:
“There’s a couple of headwinds in the Biden plan besides just the U.S. corporate rate going up to 28%. There’s also the impact on the foreign earnings piece that we’re working through. And so if the full Biden plan goes into effect, then it puts the U.S.-based companies at a disadvantage as they would be subject to higher tax rates on their foreign earnings than their foreign competitors.” (April 14)
Goldman Sachs Group Inc. CFO Stephen Scherr:
“We expect our tax rate under the current tax regime to be approximately 21%. […] We continue to monitor the impact of various proposals being made in the U.S. on the federal and state level.” (April 14)
Dell Technologies Inc. CFO Tom Sweet:
“We need to understand better which provisions come through. We want to make sure that tax policy allows us to remain competitive.” (April 14)
Levi Strauss & Co. CFO Harmit Singh:
“I believe these investments in our country’s infrastructure are long overdue, badly needed and could be a win for business and a win for the American people. The details will be up to Congress to negotiate, and we are happy to work with them on that. We are willing to pay our fair share when a practical, equitable solution is reached that keeps America competitive.” (April 13)
Salesforce.com Inc. CEO Marc Benioff:
“I think in the case where businesses believe, […] and I think Salesforce also believes this […], and it’s appropriate to have increased taxes that they should advocate for those taxes and they should make the case why that is. And I think in the case of the United States, we probably do need revisions and have conversations about what our tax rates should be. But we also have to balance that against the United States’ ability and need to be competitive in the world.” (April 6)
Kohl’s Corp. CFO Jill Timm:
“From a tax perspective, we continue to monitor and watch what people think will happen. The base rate would be something that we work towards, to manage that. We have seen talks about 28%, others are talking about 25%. We will try to manage that number. We will look at tax-planning strategies to try to minimize our tax burden. At the end of the day, it will have an impact on net income, which will be the case for all U.S. companies.” (April 8)
TrueBlue Inc. CFO Derrek Gafford:
“A little more capital would go to the government than to us to invest in the company or give back to shareholders. That would probably be the largest and most obvious outcome for us. I don’t think it would stop us from making the investments that we want to make in the company. This [the tax rate increase] could end up lessening how much we give back to shareholders.” (April 9)