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 on Monday that he is not concerned that a plan to increase US corporate tax collections will hurt the US economy as it emerges from the Covid-19 pandemic.
Asked if he is concerned that the White House’s plan to raise the corporate tax rate to 28% could hamper an already fragile recovery, Biden replied “in no way”.
“There is no evidence of that,” said the president of the White House’s southern lawn. “Here you have 51 or 52 companies in the Fortune 500 that haven’t paid a single cent in taxes in three years.”
The proposed increase in the corporate fee is part of the government’s effort to fund its $ 2 trillion infrastructure proposal, a plan that many Democrats have promised to approve during the 2020 election cycle.
But while politicians on both sides of the corridor agree that American roads and bridges need extensive repair, fierce disagreements over other priorities and the final size of the project remain.
Biden and progressive Democrats favor a range of spending, including $ 621 billion in transportation infrastructure, $ 400 billion to care for elderly and disabled Americans, $ 300 billion to improve drinking water and access to broadband and other US $ 300 billion in construction and renovation of affordable housing.
Republicans, who largely opposed Biden’s $ 1.9 trillion Covid-19 aid package last month, say the president should deflate current legislation and almost unanimously oppose tax cut editions. approved by former President Donald Trump.
Trump’s tax cuts in 2017, widely seen as his historic legislative victory, reduced the corporate tax rate from 35% to 21%, which at the time was one of the highest rates among developed economies. Biden’s infrastructure plan would partially reverse Trump’s plan, raising the rate to 28%.
Republicans fear that raising the corporate tax right after lowering it may make the United States a less attractive option for companies, considering where to find new factories, jobs and profits.
For much of the past 30 years, American companies have tried to save on taxes by reincorporating in Bermuda, the Cayman Islands, Ireland and other offshore tax havens, where corporate rates are lower.
Even conservative Democratic Senator Joe Manchin of West Virginia said on Monday that he opposed the White House plan if he raised the corporate tax to 28%.
Manchin, routinely a decisive voter in a 50-50 Senate split, can single-handedly condemn the infrastructure project if Democrats choose to pass the measure in Congress through budgetary reconciliation.
Amid these concerns, Treasury Secretary Janet Yellen is leading an effort to inspire other nations to institute a minimum corporate tax to ensure that no nation gains a competitive advantage.
“We are working with the G-20 nations to agree on a global minimum corporate tax rate that could prevent the race to bottom,” Yellen told the Chicago Global Affairs Council on Monday in prepared comments. “Together, we can use a global minimum tax to ensure that the global economy thrives on the basis of a more level playing field in the taxation of multinational corporations and stimulates innovation, growth and prosperity.”
It was not clear until Monday afternoon whether Manchin had heard Yellen’s plan before his comments. The Biden plan would also raise the offshore profit tax rate to 21%, above the Trump-era rate of 10.5%.