Biden Says He’s Open to Compromise on Corporate Tax Hike
(Bloomberg) -- President Joe Biden said Wednesday he’s open to compromise to reduce his proposed hike in the corporate tax rate as he seeks to fund his sweeping infrastructure and jobs proposal.
“I’m open to compromising, yes. It doesn’t have to be exactly what I say,” Biden said at the White House when asked if he would accept raising the corporate tax rate to 25% instead of the 28% he has proposed.
The president said he has spoken to chief executives about his planned tax increases on corporations, without naming them. But Biden said he would not back down from his demand that his proposed $2.25 trillion package be offset by raising revenue.
“I’m not willing to deficit spend,” Biden said. “They already have us two trillion in the hole.”
The president’s comments send one of the strongest signals yet that if his economic proposal becomes law, it will likely be with a smaller corporate tax increase.
Senator Joe Manchin, a centrist Democrat from West Virginia, has said he opposes raising the rate to 28% from the current 21%, but that he could support a 25% tax.
With near universal opposition expected from Senate Republicans, Biden can’t afford to lose the votes of any Democrats if he seeks to use a special budget process to pass any tax increases. That means Biden would likely be negotiating with his own party, rather than Republicans, once Congress takes up his plan.
A smaller tax increase means either scaling back Biden’s proposed spending -- which progressive Democrats have said is already too small -- or finding other revenue-raising measures.
A bipartisan group of House lawmakers have suggested user fees, such as taxes on gasoline or vehicle miles traveled, to help pay for infrastructure spending, but that could run afoul of the administration’s red line of not raising taxes for those making under $400,000.
“User fees would put the burden on the backs of the American people,” White House Press Secretary Jen Psaki said Tuesday. “We have a difference of view on the pay-fors. Our view is that the 1% of people who are making over $400,000 a year can afford to pay a little bit more, but we can have a discussion about that.”
GOP leaders have slammed corporate-tax hikes as damaging to investment and likely to make it more attractive for companies to squirrel money abroad. Senate Republicans have proposed a slimmed-down $568 billion plan that focuses on traditional infrastructure like roads and bridges that is funded with user fees on electric vehicles, unspent federal funds and contributions from states. The GOP proposal includes funding for maintenance that was expected to be spent anyway.
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