Donald Trump Promises Corporate Tax Cut to Business Leaders

Trump’s Tax Cut Proposal: A Bid to Woo Corporate America

by Faruk Imamovic
Donald Trump Promises Corporate Tax Cut to Business Leaders
© Getty Images/Anna Moneymaker

In a bid to regain favor with corporate America, former President Donald J. Trump addressed some of the nation's most powerful chief executives at a private meeting in Washington, D.C., last Thursday. According to three anonymous attendees, Trump announced his intention to lower the corporate tax rate from 21 percent to 20 percent.

This revelation, shared during a Business Roundtable gathering, elicited a palpable sense of relief among the attending executives.

An Audience of Industry Titans

From a comfortable gray armchair, Trump conversed with his former economic adviser Larry Kudlow, in front of a distinguished audience that included Tim Cook of Apple, Jamie Dimon of JPMorgan Chase, Doug McMillon of Walmart, and Charles W.

Scharf of Wells Fargo. The Business Roundtable, an influential corporate group, hosted the event, providing a platform for Trump to address the concerns of business leaders. Many executives have harbored anxieties about Trump's potential second term, fearing a shift away from his initially business-friendly stance.

This apprehension was exacerbated by their public criticism and eventual abandonment of Trump following the January 6, 2021, Capitol attack. However, Trump’s comments during this meeting seemed designed to assuage these concerns.

A Shift in Tone

Known for his often incendiary public speeches, Trump adopted a more measured tone in this setting. He notably softened his usual hard-line rhetoric on immigration, a topic of significant interest to the business community.

His focus on tax cuts, however, drew the most positive reaction. Kudlow's first question to Trump addressed the imminent expiration of parts of the 2017 tax-cut package. Trump emphasized his desire to reduce the corporate tax rate to a "round number" of 20 percent, arguing that such a move would enhance American companies' competitiveness and spur job creation.

He credited his previous tax cuts, especially the reduction of the corporate rate from 35 percent to 21 percent, for the robust economic performance during his first term, up until the onset of the pandemic.

Donald Trump Promises Corporate Tax Cut to Business Leaders© Getty Images/Jemal Countess

The Stakes of Tax Policy

The 2017 tax law, a hallmark of Trump's presidency, included permanent cuts to corporate tax rates and temporary reductions for individuals.

Trump has proposed extending all expiring elements of this law, including the lower marginal tax rates across income levels and higher thresholds for estate tax exemptions. In contrast, President Biden has suggested maintaining lower rates for modest and middle incomes while increasing taxes on personal incomes above $400,000 and larger inheritances.

Biden also proposes raising the corporate tax rate to 28 percent. Biden argues that his approach would prevent additional national debt by ensuring the wealthy and corporations contribute more, offsetting the revenue loss from extending tax cuts for lower and middle incomes.

Fully extending the 2017 tax cuts without corresponding spending cuts would add trillions to the national debt, a point of contention between the two political camps.

Reassurance and Realities

Trump's tax policy has become a rallying point for his wealthy donors and potential backers, who fear losing the benefits of the 2017 cuts without Republican control in Washington.

His remarks on Thursday aimed to reassure these stakeholders of his commitment to maintaining a favorable business environment. Aside from tax policy, Trump also addressed immigration, signaling support for high-skilled immigrants.

He acknowledged the contributions of those who come to the U.S. for education and work, suggesting it was wrong to send them back to their home countries. This stance marked a departure from his administration's previous restrictive immigration policies, which had caused friction with business leaders.

Deregulation and Tariffs

Trump's discussion extended to his deregulation agenda and efforts to streamline the permit process for businesses. He reiterated these points to appeal to the executives, highlighting his administration's past efforts to reduce regulatory burdens.

However, not all of Trump's proposals were met with enthusiasm. He restated his support for imposing higher tariffs on imported goods, a policy generally opposed by business interests. Higher tariffs could increase costs for companies reliant on imported materials and potentially trigger retaliatory trade measures from other countries, complicating international business operations.

Biden's Economic Defense

The Business Roundtable meeting also featured remarks from White House Chief of Staff Jeffrey D. Zients, who defended the Biden administration's economic policies. Zients emphasized America's strong post-pandemic economic recovery and the administration's strategies to compete with China.

He argued that trade wars and mass deportations would be detrimental to America's progress. Zients, a former CEO, resonated with the audience, speaking their language and underscoring the administration's commitment to economic stability.

A Divided Business Community

As Trump courts corporate leaders for support and funding, the business community finds itself in a precarious position. Many executives, though wary of Trump's controversial style and policies, are weighing the potential benefits of his tax proposals against the broader implications of his administration.

The prospect of another Trump presidency looms large, with business leaders cautiously navigating their support amidst a politically charged landscape.

Donald Trump