- Biden has reportedly made a huge concession in infrastructure talks with Republicans to ditch a corporate tax hike.
- Instead, he would introduce a minimum corporate tax of 15%.
- The Republicans have so far barely moved in the negotiations. They want to speak again on Friday.
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In a major concession to the GOP, President Joe Biden offered to drop his proposed withdrawal of the GOP Tax Act of 2017 and instead impose a minimum 15% tax rate on large corporations as part of a non-partisan infrastructure package. He’s also cut the amount of spending he wants in the talks down to $ 1 trillion.
It was first reported by the Washington Post, and a senior administrator later confirmed it.
“This should be perfectly acceptable to Republicans,” White House press secretary Jen Psaki said at a press conference Thursday.
The move comes as the president continues a fourth week of negotiations with the GOP that has ruled out changes to its Republican tax cuts. Biden had proposed raising the corporate tax rate from the current 21%, enacted under President Donald Trump’s tax law, from 28% to 28%.
Instead, Biden suggested a minimum corporate tax of 15% as a possible solution, a levy that would be aimed directly at companies that pay little to no tax. The president previously cited a report by the left-wing Institute for Taxes and Economic Policy that 55 large American corporations did not pay federal income taxes over the past year.
The White House did not respond to a request for comment.
The move represents a sharp break with Biden’s earlier fiery rhetoric about the need for higher corporate taxes. Still, some centrist Democrats like West Virginia Senator Joe Manchin are pushing for a rate closer to 25% instead of 28%. Biden wants to offset his planned infrastructure spending with tax increases for companies and the country’s top earners.
The Republicans, led by Senator Shelley Moore Capito of West Virginia, unveiled an infrastructure plan last week with only modest new expenditures in excess of those already approved by Congress. Both parties argue about the size and scope of the package, as well as the method of payment.
Republicans are trying to fund their spending with coronavirus aid money, which many Democrats are opposed to.
It also comes amid the US push to introduce a global minimum corporate tax rate that aims to standardize taxes for multinational corporations and prevent them from fleeing to countries with lower taxes. The last number reported for this quota is also 15%, not the expected 21%.
This provision met with early opposition from Republicans. “I don’t think this will appeal to members of my party, and I think it will be a tough sell to the Democrats,” Senate minority leader Mitch McConnell said Thursday in Kentucky.
The White House also wants to step up tax enforcement for businesses and high earners.
“It’s just not fair. It’s not fair to the rest of American taxpayers,” Biden said earlier in a speech defending the corporate tax increase. “We will try to put an end to that. You are not allowed to harass them – 28%. If you’re a mom, dad, cop, firefighter, cop, etc., you pay about that much your income tax. “
Capito and Biden are supposed to speak to each other again on Friday.