Joe Biden offered a major concession to Republicans in his infrastructure bill negotiations Wednesday in a u-turn where he offered a 15 pe...
Joe Biden offered a major concession to Republicans in his infrastructure bill negotiations Wednesday in a u-turn where he offered a 15 per cent minimum corporate tax rate instead of hiking it from 21 to 28 per cent.
Undoing Donald Trump’s 2017 tax cuts, which brought the corporate rate from 35 per cent to 21, was a nonstarter for Republicans.
Instead president said during his meeting with GOP Senator Shelley Moore Capito, a source told The Washington Post, that he would be willing to trade that for raising the minimum rate to 15 per cent.
This alternative would take aim at profitable U.S. corporations that, through deductions and other write-offs, are currently paying on average 10 per cent in corporate taxes at the federal level.
The President of Taxpayers Protection Alliance David Williams told DailyMail.com that some corporations even pay 0% because they use 'deductions to minimize their bill.'
While the corporate tax rate could go down to nothing, U.S. corporations still pay several other taxes like property, social security and payroll.
To ensure corporations pay their 'fair share', Biden's proposal would ramp up enforcement on those corporations who use these deductions and loopholes to avoid bigger tax burdens.
The leeway from Biden shows the White House is trying to avoid a standstill in negotiations. However, it hardly appears a huge compromise from the president – and would actually be a major win – as Biden previously proposed during the campaign ta 15 per cent corporate tax minimum.
When asked what will happen if Republicans reject the counter from Biden, White House Press Secretary Jen Psaki said: 'It would mean having the view that these 50 corporations who don't pay taxes shouldn't pay any taxes at all.'
President Joe Biden and Republican Senator Shelley Moore Capito met one-on-one in the Oval Office on Wednesday to discuss the GOP counter to his infrastructure plan. A report indicates Biden said he would be willing to ditch raising the corporate tax rate from 21 to 28 per cent and instead use a 15 per cent minimum increase to fund his infrastructure plan
Biden left to Delaware after the meeting Wednesday for a trip to his beach house in Rehoboth for first lady Jill's 70th birthday. The president and first lady are pictured Thursday on a bike ride together in Cap Henlopen State Park in Lewes, Delaware
Capito (far left) briefed her GOP negotiating partners on the meeting, which includes Senators Roy Blunt (right), Pat Toomey (center) and John Barrasso (left). Raising the corporate rate – and essentially undoing Trump's 2017 tax cuts – was a nonstarter for the Republicans
Republicans say raising the corporate rate will decrease America's competitiveness on the world stage. Biden is now saying he wants there to be a 15% minimum in the U.S. His previously proposed 28% rate would create an average of 32.34% when combined with state rates
The source, however, maintained that Biden remains committed to raising tax rates on corporations and wealthy Americans.
The revised version of his $2.2 trillion plan was presented to Capito, the lead GOP negotiator on infrastructure, during a one-on-one meeting at the White House on Wednesday.
Despite the move in the right direction, the meeting proved the parties are still not ready to sign off on a deal as they remain nearly $900 billion apart on the ideal price tag.
Biden's original price tag has already dropped several billions and now includes $1 trillion in new spending.
Republicans fumed when Biden proposed corporate tax hikes as a way to pay for the plan – they claimed it would hurt America's competition on the world stage.
'This is a bad idea for business competitiveness for the country,' Williams told DailyMail.com. 'And it's not going to bring in the money they think it will.'
'No tax increase ever brings in the expected revenue.'
Following Capito's meeting in the Oval Office Wednesday, Biden left for his beach house in Rehoboth, Delaware to celebrate first lady Jill Biden's 70th birthday.
Capito briefed Republican Senators John Barrasso of Wyoming, Roy Blunt of Missouri, Mike Crapo of Idaho, Pat Toomey of Pennsylvania and Roger Wicker of Mississippi on the discussion.
Politico reported Thursday morning that Biden doubled-down on his corporate tax increase to 28 per cent during the meeting, with which the Republican negotiating partners were not pleased. However, it later was revealed Biden actually proposed increasing the minimum to 15 per cent as a compromise.
Biden, however, has previously proposed a 15 per cent corporate minimum – even on the global level.
Williams says this is a really bad idea, especially for smaller countries.
Politico reported that three sources claimed Biden doubled-down on wanting to raise corporate tax rates to fund the infrastructure plan
The White House posted the image of Biden and Capito speaking in the Oval Office, claiming their conversation was 'constructive'
'Ireland, which has a 12 per cent corporate rate, is freaking out about this,' he said. 'Countries want to be competitive with each other.'
'Quite frankly, some of the smaller countries may not be able to compete' if Biden is successful in his bid to bring the global minimum rate to 15 per cent.
If corporate income taxes were raised to 28 per cent in the U.S., an analysis shows it would bring in $268 billion this year, $371 billion in 2022, and $577 billion in 2023.
Senate Republicans, however, have said they have no interest in revisiting Donald Trump's 2017 tax cuts, which saw the corporate rate drop from 35 per cent to 21 – the first major drop since the 1980s.
'I have a hard time seeing this go ahead because Republicans' plans always have baseline included,' a person familiar with the negotiations told Politico.
'I don't think Senate Republicans are interested in $1 trillion in new spending, or changing the tax cuts,' they continued, 'or raising other taxes — and that's been clear from Day 1.'
They added: 'It's a great dance but at some point the music is going to stop. Clearly nobody wants to be holding the bag.'
Biden released his $6trillion FY 2022 budget, which combines his American Jobs Plan, American Families Plan and other discretionary spending that the GOP claims will leave the U.S. drowning in 'debt, deficit and inflation'.
The president proposes that the biggest federal package since World War II be fueled by higher taxes in the corporate sphere, but also on high-earning Americans – specifically those earning more than $400,000.
With the amount of funding needed for this plan, the U.S. will end up needing to borrow 50 cents for every $1 spent.
Capito's latest counter proposal to Biden's infrastructure plan had a total of $928 billion, which includes $257 billion in new spending. The White House's last number was $1.7 trillion, which includes around $1 trillion in new spending.
The West Virginia Republican senator and Biden both issued rather mundane statements on the meeting Wednesday, previewing they would take more on Friday. While the two met at the White House to discuss the plan the first time, it's likely their second chat will be over the phone.
'Today President Biden hosted Senator Capito for a constructive and frank conversation about working together to grow the economy and benefit America's middle class workers and families by investing in our infrastructure,' the White House Twitter wrote in a post on the meeting Wednesday along with a picture of the duo speaking in the Oval Office.
The GOP is looking to create another counteroffer that could come as soon as Friday, but they have indicated they are starting to feel discouraged regarding bipartisanship on this bill.
The White House and Republican Senate negotiators are working hard to work together on this bill, but there are some areas where neither side is willing to compromise – including Biden's corporate tax hikes.
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