Home Posts In An Attempt To Sway Republicans, Joe Biden Makes A Significant Concession On Corporate Taxes.
In An Attempt To Sway Republicans, Joe Biden Makes A Significant Concession On Corporate Taxes.
Joe Biden

In An Attempt To Sway Republicans, Joe Biden Makes A Significant Concession On Corporate Taxes.


During a meeting with Sen. Shelley Moore Capito (R-W.Va.), the top Republican negotiator on a legislative package aimed at overhauling national infrastructure, President Joe Biden made a key concession on corporate taxes.

Instead of raising the corporate tax from 21% to 28% to fund new infrastructure projects, Biden proposed instituting a 15% minimum corporate rate to address the fact that many of America's largest corporations are able to avoid paying federal corporate income taxes entirely.

The White House press secretary Jen Psaki confirmed the news, which was first reported by The Washington Post, during a press briefing on Thursday.

“This should be completely acceptable to Republicans,” Psaki said, adding that rejecting the proposal would imply “believing that these 50 corporations that don’t pay taxes should not pay any taxes at all.”

In addition to proposing an alternative method to help pay for the infrastructure package, Biden proposed reducing the price tag to $1 trillion in new spending over eight years, down from an initial $2.2 trillion, but that $1 trillion would be in addition to the $400 billion that lawmakers have already agreed to spend on surface transportation over the next five years.

It's unclear whether Republicans will accept Biden's new offer or make another counter-proposal. The GOP has proposed far less in new federal spending, only $250 billion, and they argue that any infrastructure spending total should include the $400 billion for surface transportation. Biden and Capito are scheduled to speak again on Friday, but time is running out for bipartisan talks.

The Biden administration is also not ruling out raising the corporate tax rate, which Republicans will undoubtedly consider when deciding whether to support any bipartisan infrastructure agreement. Democrats could, for example, raise the corporate tax rate later to pay for other Biden proposals, such as child care and child tax credits.

When asked if he had abandoned his plan to raise the corporate tax to 28%, Psaki replied, "Absolutely not... He continues to believe corporations should pay more."

In addition to Capito, who is keeping Senate Minority Leader Mitch McConnell (R-Ky.) updated on the talks, Biden must persuade nine other Republican senators to support a deal and avoid a filibuster.

“I don’t think that’s going to appeal to members of my party, and I think it’ll be a hard sell to the Democrats,” McConnell said of including tax increases as part of an infrastructure package on Thursday. “Let’s reach an agreement on infrastructure that’s smaller, but still significant and fully paid for.”

Republicans reduced the corporate tax rate from 35% to 21% with the Tax Cuts and Jobs Act of 2017. That law also reduced individual tax rates, but because budget rules only allowed them to increase the deficit so much, the individual provisions of the law expire in 2025. Republicans made only the corporate changes permanent, and have spoken in recent weeks about the corporate tax cuts as sacred.

During the 2018 election cycle, Democrats repeatedly chastised Republicans for permanently lowering the corporate tax rate while only temporarily lowering individual tax rates for the middle class, thereby primarily benefiting the ultra-wealthy.

Since then, Democrats have been more cautious about raising the rate back to 35%, despite the fact that the Biden administration settled on 28% in its initial infrastructure proposal to Congress.

However, Biden's outreach to Republicans has irritated progressive lawmakers, who want to see corporate tax increases pay for a slew of infrastructure projects and social welfare programs ranging from investments in electric vehicles to expanding access to child care.

“I disagree with the decision to remove an increase in the corporate tax rate from infrastructure discussions,” Rep. Ro Khanna (D-Calif.) said, adding that “the American people overwhelmingly support making corporations pay their fair share.”

“If raising the corporate tax rate to 28% is removed from infrastructure discussions, we must ensure that that increase is included in any subsequent reconciliation bill,” Khanna said.

Similarly, Senate Finance Committee Chairman Ron Wyden (D-Ore.) warned that removing a corporate tax increase from consideration could jeopardize other Democratic agenda items.

“Inadequate corporate tax revenue could leave many critical investments important to the American people on the table, falling far short of the $2 trillion in corporate revenue called for in the president’s proposals,” Wyden said in a statement to Stardia.

0 Comments
Leave a Reply

Your email address will not be published, Required fields are marked with *.