To pay for a bipartisan infrastructure plan worth at least $1 trillion, President Joe Biden is now saying that firms should not take advantage of tax loopholes, pivoting from his earlier stance of increasing the corporate tax rate. However, the White House says Biden still favors boosting business taxes to fund other aspects of his agenda.
Biden's new infrastructure counteroffer, presented to Republican senators this week, would retain former President Donald Trump's 2017 tax cuts in place. These tax cuts have been labeled a "red line" by Republicans in their talks with the White House.
The revised proposal no longer raise the corporate tax rate from 21% to 28%. Instead, it will lists tightening tax enforcement on the country's wealthiest earners and ensuring that the largest corporations pay at least 15%.
Biden stated that he wants at least $1 trillion in infrastructure spending in addition to the $400 billion in basic infrastructure expenditure already authorized.
Biden's plan to raise the corporate tax rate remains
"This should be entirely acceptable to a lot of Republicans who have stated that their main point is that they want to preserve the 2017 tax legislation," White House press secretary Jen Psaki said on Thursday, as per USA Today.
Psaki did not specify whether Biden is willing to cut the budget deficit to less than $1 trillion. Biden's attempt to raise the corporate tax rate to pay for plans like a $1.8 trillion family plan with subsidized child care and nationwide prekindergarten has not been abandoned, Psaki noted.
The Washington Post first reported Biden's offer, which he made at a private one-on-one meeting with Sen. Shelley Moore Capito, R-W.Va., who is the primary negotiator for a group of six Republicans seeking a compromise with the White House on infrastructure.
The Oval Office discussion lasted over an hour. Biden and Capito, who are at Rehoboth Beach, Delaware, said they expect to meet again. The Senate office of Senator Capito declined to comment on the President's offer.
To get closer to an amount Republicans approve of, Biden cut the cost of his American Jobs Plan from $2.25 trillion to $1.7 trillion. Republicans increased their counter-proposal from $568 billion to $928 billion last week. On top of the basic funding, their plan includes $290 billion.
Republicans advocated diverting already-approved COVID-19 rescue money and imposing user fees to support infrastructure - suggestions that the Biden administration quickly dismissed.
In addition to traditional infrastructure, Biden remains dedicated to social infrastructure. His plan includes a $400 billion proposal to reform caring for the elderly and persons with disabilities.
However, Republicans oppose. They stated that they are only ready to pay for physical infrastructures like bridges, roads, airport maintenance, and broadband expansion.
The White House is particularly concerned that the GOP counteroffer has little or no financing for rehabilitating Veterans Affairs facilities, transportation systems like trains, repairing lead pipes across the country, and investing in renewable energy jobs.
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Corporate tax hike offer reduced to a minimum rate of 15%
The meeting between Biden and Capito demonstrated that the parties are still not ready to sign a deal. They are still about $900 billion off on the acceptable price tag.
Despite being reduced by many billions, Biden's infrastructure plan still includes $1 trillion in additional expenditures. Republicans were outraged when Biden advocated raising corporate taxes to pay for the proposal, claiming it would undermine America's global competitiveness.
Biden recommends a 15 percent corporate minimum tax - even at the global level. According to an analysis, raising corporate income taxes to 28 percent in the United States would bring in $268 billion this year, $371 billion in 2022, and $577 billion in 2023.
But Senate Republicans said they have no interest in reviewing President Donald Trump's 2017 tax cuts, which saw the corporate rate drop from 35 percent to 21 percent for the first time since the 1980s.
Biden unveiled his $6 trillion budget for the fiscal year 2022, which included his American Jobs Plan, American Families Plan, and other discretionary expenditures that the GOP warned will sink the US in debt, deficit, and inflation.
The President recommended that the largest massive government spending plan since WWII should be funded by increased corporate taxes, as well as additional taxes on high-income Americans, especially those earning more than $400,000. With the amount of money required for this proposal, the US will have to borrow 50 cents for every dollar spent, as per Daily Mail.
Related Article: Much Reduced Biden Infrastructure Bill Meets Rejection as Democrats and Republicans Continue To Disagree
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