President Joe Biden talks to reporters on the south lawn of the White House in Washington, USA on March 14, 2021.
Cheriss May | Reuters
President Joe Biden said Monday that he is not worried that a plan to increase the U.S. corporate tax bill will dampen the U.S. economy as it emerges from the Covid-19 pandemic.
Asked if he worries that the White House plan to raise the corporate rate to 28% could hurt an already fragile recovery, Biden replied “not at all.”
“There is no evidence of that,” the president said from the southern part of the White House. “Here are 51 or 52 Fortune 500 companies that haven’t paid a penny in taxes for three years.”
The proposed corporate tax hike is part of the administration’s effort to fund its $ 2 trillion infrastructure proposal, a plan many Democrats promised to approve during the 2020 election cycle.
But while politicians on both sides agree that U.S. roads and bridges need thorough repair, fierce disagreements remain over other priorities and the final size of the bill.
Biden and Progressive Democrats favor spending, including $ 621 billion on transportation infrastructure, $ 400 billion to care for American elderly and disabled people, $ 300 billion to improve drinking water and access to bandwidth wide and another $ 300 billion in the construction and adaptation of affordable housing.
Republicans, who widely opposed Biden’s $ 1.9 trillion Covid aid package last month, say the president should deflate existing legislation and almost unanimously oppose the cuts. taxes passed by former President Donald Trump.
Trump’s 2017 tax cuts, widely regarded as his biggest legislative victory, reduced the corporate tax rate from 21% to 21%, which at the time was one of the highest rates among economies. developed. Biden’s infrastructure plan would partially reclaim Trump’s plan by raising the rate to 28%.
Republicans worry that raising the corporate rate so soon after lowering it could make the U.S. a less attractive option for companies considering where to locate new factories, jobs and profits.
For much of the past 30 years, U.S. companies have tried to save taxes by rejoining Bermuda, the Cayman Islands, Ireland, and other marine tax havens where corporate rates are lower.
Even Conservative Democratic Sen. Joe Manchin of West Virginia said Monday he opposes the White House plan if it would raise the corporation tax to 28 percent.
Manchin, usually a key voter in a 50-50 division in the Senate, could individually condemn the infrastructure bill if Democrats choose to push the measure through Congress through budget conciliation.
“Because the bill exists today, it needs to be changed,” Manchin told Hoppy Kercheval, host of West Virginia Metro News ’“ Talkline ”program. “I’m not talking about raising taxes other than … I think [the corporate rate] it should never have been less than 25%, this is the world average. And that’s what basically every corporation would have told you was fair. “
Amid these concerns, Treasury Secretary Janet Yellen is leading an effort to inspire other nations to set a minimum corporate tax to ensure no nation gains competitive advantage.
“We are working with G-20 countries to agree on a global minimum corporate tax rate that can stop the race to the bottom,” Yellen told the Chicago Global Affairs Council Monday in prepared statements. “Together we can use a global minimum tax to ensure that the global economy thrives on more equitable conditions in the taxation of multinational corporations and fosters innovation, growth and prosperity.”
As of Monday afternoon it was unclear whether Manchin had heard of Yellen’s plan before his comments. The Biden plan would also increase the offshore income tax rate to 21%, compared to 10.5% in the Trump era.