As President Biden continues to negotiate an agreement on infrastructure spending with Republicans, in his most recent conversation with GOP Senator Shelley Moore Capito on Wednesday, he highlighted his proposal to support the financing with taxes, the White House suggested.
“What happened in the last few days and also in the meeting [with Capito] “Yesterday the president thoroughly reviewed all of his proposed tax reforms,” White House press secretary Jen Psaki told reporters on Thursday. One of the proposals she mentioned was a minimum tax of 15% on the most profitable companies in the country.
Psaki pointed out that the introduction of a minimum corporate book tax rate for some companies came from the American Jobs Plan, the $ 2.3 trillion infrastructure proposal that Mr Biden has since agreed to, down to $ 1.7 trillion to reduce.
After the first iteration of the establishment plan, the levy would be a 15% tax on the book earnings of the wealthiest companies, i.e. the high profits they disclose to their shareholders in their annual reports as opposed to their normally taxable income, a number that owes to which, in the opinion of the Biden government, can often amount to “substantial loopholes in current tax law” as much as zero. This tax could be levied on the 200 or so companies that make at least $ 2 billion a year in profits.
Republicans have opposed Mr Biden’s proposal to raise the corporate tax rate from 21% to 28% – they have no interest in reversing the 2017 tax cut laws signed by former President Trump. Although Psaki said Thursday that Mr. Biden “absolutely not” gives up his desire to raise the overall corporate tax rate, the president’s emphasis on minimum book tax for some corporations suggests he is ready to work on ideas with Republicans to pay for legislation that both parties may find pleasant.
“This should be perfectly acceptable to a number of Republicans who have said the bottom line is that they want to leave the 2017 tax bill intact,” said Psaki. She noted that “this is not a new idea” but “part of what he proposes as payment that he asks if you could agree to”. Mr. Biden’s emphasis on the minimum corporate tax rate as a means of payment was first reported by the Washington Post.
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Psaki reiterated that Mr Biden believes companies should pay more taxes, but noted that there are several ways to fund his proposals.
“If you don’t think companies shouldn’t pay taxes at all – and we leave that to others who you can talk to – there should be a way to find a way to come to an agreement,” said Psaki.
According to an analysis by the Institute on Taxation and Economic Policy, a left-leaning nonprofit tax policy organization, at least 55 of the largest companies paid no federal corporate income in the past fiscal year.
Capito and a group of five other Republican senators unveiled a nearly $ 1 trillion proposal last week, which includes $ 257 billion in new spending. A senior Republican adviser confirmed to CBS News that Mr Biden Capito said at their meeting on Wednesday that he wants an infrastructure proposal with new spending of $ 1 trillion, far more than what Capito and the Republicans have offered .
Republicans have suggested using untapped funds from previous coronavirus relief efforts and user fees to pay for an infrastructure proposal. But Mr Biden ruled out user fees because they could end up levying taxes on Americans who make less than $ 400,000 a year, and he’s not keen on using coronavirus-related funds.
Mr Biden suggested reusing up to $ 75 billion in coronavirus relief funds that were passed ahead of the US bailout plan, Psaki confirmed, but noted that “the vast majority of those funds will be allocated”.
Mr Biden and Capito are expected to have another conversation on Friday, although it is unclear whether Capito will propose another counteroffer. Psaki said negotiations could go beyond next Monday, contradicting Transport Secretary Pete Buttigieg, who earlier this week said there would be a soft June 7th deadline for talks.
“We are not here to set new deadlines, we will continue these talks,” said Psaki.
Still, Psaki hinted that the White House would not wait forever to reach an agreement, saying there were “a number of ways forward” in infrastructure. She noted that next week the House would begin topping up the US employment plan in its current form.
Sarah Ewall-Wice and Allison Gualtieri contributed to this report.