Tax cuts vs. 'direct investments': Trump and Biden make dueling pitches to business leaders

Ben Werschkul
·Washington Correspondent
Updated Thu, Jun 13, 2024

The Trump campaign and the Biden administration offered a new outreach to the business world Thursday that crystallized their different promises to corporate America should they win the election.

Both, in a sense, offered carrots just of a different flavor during a chaotic day that played out in both Washington and in New York.

Donald Trump met Thursday morning with prominent CEOs in the nation's capital, speaking to a group supremely focused on tax reform.


The former president was interviewed on stage by Larry Kudlow, his former top economic adviser, and appeared before an audience that included figures like Jamie Dimon of JPMorgan Chase (JPM) and Tim Cook of Apple (AAPL) and reportedly dozens more CEOs.

Former President Donald Trump waves as he heads to a meeting with CEOs in Washington, DC on Thursday. (Nathan Howard/Getty Images) (Nathan Howard via Getty Images)

Trump’s visit with the CEOs came during a wide-ranging day that included two stops on Capitol Hill to garner support from House and Senate Republicans and discuss strategy for the coming election. It was Trump’s first visit to Capitol Hill since he left office, and since the violence of Jan. 6, 2021.

Trump didn’t offer any initial commentary on what he told the CEOs but summarized the day in a short speech by saying Washington DC was no longer special and "we have to get elected" to change that.

From the other side, Treasury Secretary Janet Yellen also sketched out a vision of what a second Biden term might look like in a speech to New York business leaders.

She described a different approach from Biden focused on using the government for "public interventions to create a supportive environment for business and fuel private sector investments."

Yellen's message Thursday in New York also included a stick of sorts, as she reiterated President Joe Biden's overall plan - as he often puts it - to ask the business world to pay their "fair share" in taxes if he is reelected.

Biden was invited to address the gathering of CEOs alongside Trump but is currently in Italy for a G7 conference and sent White House chief of staff Jeff Zients, a former business executive, in his stead.
The focus on taxes

It remains to be seen which approach resonates with the overall business community and the public at large.

But many CEOs have signaled a close focus on taxes in the coming year ahead of the expiration of key provisions in the 2017 Trump tax cuts at the end of 2025.

Trump met Thursday with members of the Business Roundtable, an association of top business executives currently chaired by Cisco (CSCO) CEO Chuck Robbins. Proctor and Gamble (PG) CEO Jon Moeller heads up tax issues for the group as the chair of its tax and fiscal committee.

Ahead of the Trump meeting, officials at the group laid out detailed priorities for taxes and announced a willingness to spend over $10 million to get their message out that tax reforms are needed for global competitiveness.

In a back-and-forth with reporters, Business Roundtable CEO Joshua Bolten downplayed Trump's less business-friendly ideas — such as his determination to impose a 10% tariff on US trading partners.

The third stop on Trump's day was a meeting with Senate Republicans. (Anna Moneymaker/Getty Images) (Anna Moneymaker via Getty Images)

"We're not looking at it as a package deal," he said. "We think that taxes ought to be low, and we think unjustified tariffs ought not be put into place."

Indeed, the plan Trump has outlined would center on an extension of his 2017 tax cuts that cut costs for many individuals and businesses. He is promising to extend those cuts and also potentially make new ones, including an idea to further lower the corporate tax rate.

During his visit to Washington, Trump also worked to put the plans into action if he wins. He met first with House Republicans, then with Business Roundtable CEOs, and then with Republican senators to plot strategy and try to garner support.

House Speaker Mike Johnson and other lawmakers are making plans — if their party sweeps the House, Senate, and Presidential elections this fall — to quickly push an extension of those tax cuts through Congress using a process known as reconciliation.

The maneuver requires only a simple majority in the Senate but requires unified control of government by one party.

"We believe we’re headed for a great November," Johnson said after the meeting and if it comes to pass "we will not waste a moment, we will be working on a very aggressive agenda" — mentioning fiscal issues as well as possible reforms to the judiciary following Trump’s conviction for falsifying business records.
The Biden team's pitch

The Biden team’s pitch to business is focused on more government support.

With the president in Europe, it fell to Secretary Yellen and Lael Brainard, Biden's top economic adviser, to offer that message.

Yellen spoke at the Economic Club of New York on what she calls "modern supply-side economics." She underlined how a second term for Biden could include more government help for businesses — while also standing firm that tax cuts would likely end.

She said that "traditional supply-side economics wrongly assumes that policies such as tax cuts for those at the top and deregulation will fuel growth and prosperity for the nation at large."

The Economic Club of New York presented US Secretary of the Treasury Janet Yellen with the Peter G. Peterson Leadership Excellence Award on Thursday in New York City. (Selcuk Acar/Anadolu via Getty Images) (Anadolu via Getty Images)

She instead laid out in detail a plan for additional collaboration saying "this broad-based approach brings benefits not just for American workers and families but for businesses and the economy as a whole."

Biden has indeed had notable successes using government power to spur strategically important sectors.

The 2021 CHIPS and Science Act spawned a wave of new semiconductor activity and put the US on pace, top officials said, to produce 20% of the world's most advanced semiconductor chips by the end of the decade. The US currently produces 0% of these chips.

And just this week, the White House announced that an electric vehicle tax credit in the 2022 Inflation Reduction Act has now saved consumers over $1 billion since taking effect in January.

The question, at least when it comes to how the message is received by CEOs, is whether business leaders will only be interested in the tax issue, where Biden is offering little for them to like.

"The last thing we want to do is go backwards on tax," said Cisco's Robbins during this week's discussion with reporters.

Biden's team has said his message may be unwelcome in C-suites, but they nonetheless feel it will nonetheless resonate with voters.

It was a point underlined in a new White House memo released Thursday where Brainard pointed out that Trump's promise of tax cuts does not include a plan of how they would be paid for.

Trump, she wrote, would balance the books by "making hard-working Americans pay — whether by taxing household purchases, severely cutting Social Security and other programs hard-working Americans count on, or ballooning our national debt."

In her own call with reporters, Brainard maintained that it was a winning issue and that people don't think billionaires and big businesses aren't paying enough, so "the president is on firm ground when he talks about tax fairness."

This post has been updated with additional developments.

Ben Werschkul is Washington correspondent for Yahoo Finance.