Manchin Balks at Biden’s Corporate Tax Increase, Favors 25% Rate
Manchin Balks at Biden’s Corporate Tax Increase, Favors 25% Rate
(Bloomberg) -- President Joe Biden’s $2.25 trillion economic plan ran into trouble Monday with a key Senate Democrat, West Virginia’s Joe Manchin, who demanded changes to tax provisions in order to secure his crucial support.
Manchin told a local news outlet he wouldn’t support raising the corporate tax rate from 21% to 28% as Biden proposed to pay for increased infrastructure and social-welfare spending. Manchin said he would be in favor of closing tax “loopholes” that benefit the wealthy and could support an increase in the corporate rate to 25%, which he said is the global average.
In 2017, Manchin proposed a 25% corporate rate as an amendment to the Republican tax law.
“As the bill exists today it needs to be changed,” Manchin said on WVMetroNews radio’s “Talkline” Monday. “This bill will not be in the same form you’ve seen it introduced or see people talking about it.”
In the face of expected united Republican opposition to Biden’s proposal, Democrats will need Manchin’s vote and that of every other Democrat and independent to reach the 51 votes needed to use a special budget process to pass any tax increases.
“If I don’t vote to get on it, it is not going anywhere,” Manchin said. “It’s more than just me. There are six or seven other Democrats that feel strongly about this. We have to be competitive, and we are not going throw caution to the wind.”
“This whole thing has got to change,” he said.
Breaking Up
Manchin said the bill may be broken up into three different bills in order to pass. Some Republicans have said they could support a smaller infrastructure-focused measure. He plans to continue working with a group of Democratic and Republican senators to craft a bipartisan bill, Manchin said.
Democrats are weighing in on other aspects of the Biden economic plan as well. Also on Monday, three top Senate Democrats released a proposal to overhaul the U.S. international tax system that could shape the outcome of the global tax revamp that the White House is pursuing to fund infrastructure spending.
Separately, Senate Minority Leader Mitch McConnell reiterated his opposition to Biden’s plan, calling it another round of massive spending with a tax increase and more borrowing.
“If that’s the package, a bunch of more borrowed money plus undoing the tax relief that drove our economy to a 50-year high -- I can’t imagine that’s going to be very appealing to many Republicans,” McConnell said at a press conference in Kentucky.
McConnell said he would be willing to discuss an infrastructure package that was smaller, wasn’t paid for by undoing the 2017 tax law and didn’t add to the deficit.
He said he opposed Biden’s $1.9 trillion virus-relief package because of deficit concerns. “Enough is enough,” McConnell said.
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