Inflation: Jeff Bezos criticizes President Biden’s plan to raise corporate tax rate
Yahoo Finance's Rick Newman examines Amazon CEO Jeff Bezos' criticism of the Biden administration's plan to raise corporate tax rates to combat inflation and how lawmakers are voting on these proposed tax plans.
Video Transcript
- Even though Disney v DeSantis has not technically declared a winner yet, the Florida feud does feel like the warm-up card for the main event that got going over the weekend. That's a good one, Bezos versus Biden, the Amazon founder on Friday responding to a tweet from the president that said raising the corporate tax would help bring down inflation.
Bezos, quote, tweeting this, "The newly created Disinformation Board should review this tweet, or maybe they need to form a new Non Sequitur Board instead. Raising corporate taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection."
Yahoo Finance senior columnist Rick Newman here to score the fight. Rick, this is a doozy. This is entertaining. True or false, mushing them together is just misinformation?
RICK NEWMAN: This is more fun than Elon's poop emoji, I think. Well, you know, Larry Summers has weighed in on this. And he said, you know, if you want to bring down demand, which is basically what the Federal Reserve wants to do, then raising taxes on companies is one way to do it.
I feel like he's a little bit of a lone voice on that, though, because we're also talking about the possibility of a recession around the corner. And one thing you probably don't want to do if you're heading into a recession is raise taxes on anybody. Wait till the economy is on better footing to do this.
But Bezos then actually went after the Build Back Better program, and they argued a little bit about that. He said, you know, they would have made this inflation problem even worse if they would have passed that $3.5 billion plan they wanted to do. And Joe Manchin, who basically said, I can't vote for this, he saved the Democratic Party.
Now, Biden himself has not punched back. But a spokesman for the White House, Andrew Bates, gave some material to "The Washington Post," saying, oh, big surprise. Bezos is super rich. He hates unions. So of course he would attack President Trump-- nothing personally from Biden himself yet.
- So, Rick, are you surprised that Bezos is weighing in on this? It seems like we haven't really heard from him. Is this sort of the rising of the CEOs and the chairmen sort of weighing in on some of these issues more vocally now?
RICK NEWMAN: Well, I mean, as somebody who follows presidents, the first thing that comes to my mind is Donald Trump, when he was president, constantly baited Bezos. He called him Jeff Bozo.
He hated Bezos, mainly because Bezos owns "The Washington Post," which was very critical of President Trump during his entire presidency. And he was always going after Jeff Bezos, including trying to get the US Postal Service to tear up its contract with Bezos's company, Amazon.
And to my memory, I don't recall Bezos ever joining the battle with Trump on Twitter. So, you know, he's no longer the CEO of Amazon. Maybe he feels he's got a little more time on his hands to wrangle on Twitter. And maybe he also thinks Biden's a little easier of a target here.
- Yeah, and Rick, I mean, it's interesting seeing Biden now engaging with Bezos and vice versa, like you were just saying. But what does this mean-- or how is this being accepted here amongst voters? We know that this is a huge issue, inflation, going into the midterms, something that President Biden is trying to address. He's addressed the American people multiple times, saying that inflation is a top priority right now. Yet we haven't really seen any movement here ahead of the midterms.
RICK NEWMAN: Inflation is Biden's biggest problem, without a doubt. And he has even said it's his top priority. I think there's a lot of credibility when Bezos says if they had passed even more spending back in 2021, that could have made inflation a lot worse.
And let's remember, the Democrats only have the slimmest possible majority in the Senate. And there was actually not an overwhelming message from voters, pass this legislation, get Build Back Better onto the books. And I think that Joe Manchin is paying no penalty at all among his constituents in West Virginia for having said he can't vote for that plan.
So I think Manchin probably did do Democrats a favor because Biden might be having to explain 10% or 11% inflation if we had fueled it even more with more government spending. And that is one of the things that we know historically causes inflation. So Bezos, not wrong.
- Manchin's approval rating actually increased more than any US Senator in the Biden administration, for context there. Another interesting note here is there's reportedly a deal between the Biden administration and Amazon Cloud Computing Services for $10 billion. Apparently, Bezos is not afraid of losing that. Bottom line, though-- raising corporate taxes, can it bring down inflation?
RICK NEWMAN: You know, there are so many things going on in the economy. Yes, probably it could. What it would do is it would raise costs for businesses, and they might spend less. So you would be addressing the demand side.
But we are not gonna get an increase in corporate taxes. I mean, this is something that the Democrats in Congress under Biden have simply not been able to do. So this is somewhat of an arbitrary and rhetorical conversation. I mean, we're talking about a bill that basically died in 2021 and does not look like it's coming back in '22. In fact, I've written that the earliest we might see any increases in taxes is 2025 because Republicans have a really good shot of taking at least one chamber of commerce-- of Congress, excuse me.
They're not gonna sign off on any tax increases. So this may not be something that comes back around unless Democrats win the White House and Congress in 2024, and they can enact this in 2025. So this is just not gonna happen.
- All right, Rick Newman. Thanks as always for breaking this down for us again, another discussion here being played out in the public eye on Twitter, kind of giving us a little bit more to talk about--
- The richest men in the world in Twitter feuds.
- I know. I know, but we love it. We love it. It's something that we wouldn't have had 10, 15, 20 years ago.
