Biden proposes minimum corporate tax rate to fund $ 1 trillion infrastructure spending
The new pitch aims to avoid Republican contempt by bypassing the president’s previously proposed corporate tax rate hike. Instead, it would put in place a minimum corporate tax rate of 15%, aimed at some of the most profitable companies in the country.
The proposal marks a concession on the overall cost of Biden’s bill, whose latest pitch was worth an additional $ 700 billion.
But Biden hasn’t convinced Republicans with the amended tax proposal, a GOP source familiar with the negotiations told ABC News.
From the start of negotiations, Republicans made it clear that they did not support increasing the corporate tax rate because they did not want to change the tax reform legislation of former President Donald Trump. In a briefing Thursday, White House press secretary Jen Psaki argued that by increasing the minimum rate, the 2017 tax bill would not be changed.
“That should be totally acceptable to a number of Republicans who have said that they – they want to go – their end goal is not to change the 2017 tax law,” Psaki said.
But according to the Republican source, GOP lawmakers see Biden’s revamped proposal, which includes several other tax changes as well as the 15% minimum rate, as nothing more than a corporate tax increase under another. last name.
A Republican rejection of the Biden tax changes would leave negotiations at a standstill once again over proposed funding models. The president has made it clear that he does not support any tax increases for people earning less than $ 400,000 a year, which Republicans have sought to overcome by proposing to increase incomes by reallocating funds from previous projects. COVID-19 relief law. The administration has said these funds are not as plentiful as Republicans think.
“There is a tiny minimal amount left,” Psaki said Thursday. “It’s certainly not going to pay off for the majority – the vast majority of – these proposals.”
Senator Shelley Moore Capito, who heads the Republican infrastructure talks, is expected to reconnect with Biden on Friday. A Republican source familiar with the talks told ABC News Republicans expected to make a counter-offer at Friday’s meeting.
Psaki said Thursday talks between the administration and Republicans were continuing in “good faith” and declined to set a deadline for the talks, but Monday’s deadline for progress set by Transport Secretary Pete Buttigieg last Sunday is drawing near.
The back-and-forths over infrastructure have been going on for weeks now, with the higher numbers from both sides gradually approaching each other.
The most recent Republican offer proposed $ 928 billion in infrastructure spending, but only included about $ 250 billion in new spending over what would already have been allowed by the federal government for infrastructure.
The latest White House offer of $ 1,000 billion is brand new money. The considerable cost difference between the packages is, in part, due to fundamental disagreements over the scope of the bill.
Republicans argued that things like child care, home care, job training and other “human infrastructure” elements of the White House package have no place in a draft infrastructure law. A source close to the negotiations said Biden’s new proposal cuts spending on some of the things Republicans have opposed, such as healthcare, electric vehicles, and the costs of building schools and homes, but the difference in cost is always important.
The $ 928 billion GOP package includes $ 506 billion for roads, bridges and major projects, $ 98 billion for mass transit, $ 46 billion for rail freight and funding for ports, airports, water storage, broadband and infrastructure funding – items they’ve labeled as “core” infrastructure.
Senate Minority Leader Mitch McConnell has delegated Capito to lead negotiations on behalf of Republicans, but his two-way hand is clear. McConnell has been arguing for weeks for a bespoke infrastructure package that abandons any proposition related to human infrastructure.
In Kentucky on Thursday, McConnell said he spoke to Capito before and after his White House meeting and issued a warning about the tax hikes.
âOnce you get into this area of ââraising taxes, you’re going to create a huge controversy,â McConnell said. “So I don’t think it will appeal to members of my party and I think it will be a hard sell to Democrats.”
McConnell predicted that if bipartisan talks collapse in the next few days, he expects Democrats to go it alone, craft a multibillion-dollar package and attempt to use reconciliation, a procedural tool for the ‘adopt which could allow them to bypass the opposition of minorities, to adopt it. But McConnell warned that it “would be extremely controversial because of the taxes they want to include in it.”
Biden threads a tough needle as he continues to make concessions to appease Republicans. He can only afford to lose four Democratic votes in the House, and as he removes Democratic priorities from the bill to satisfy Republicans, he risks losing the most progressive members of his own caucus in the House.
New York Rep. Jamaal Bowman, a freshman progressive who is among the most liberal Democrats in the House, responded to reports that Biden was seeking to compromise with Republicans on infrastructure by threatening to oppose any future agreement.
âIf what I’m reading is true, I would have a hard time voting yes on this bill. $ 2,000 billion was already the compromise. @POTUS can’t expect us to vote for a deal on infrastructure dictated by the Republican Party “, Archer tweeted Thursday.
The White House has already signaled its willingness to attempt to pass a second bill that includes some of the more controversial elements of Biden’s infrastructure package using reconciliation, but that would require the support of the 50 Democrats in the Senate and in this moment, at least two Democrats, the senses. Joe Manchin and Kyrsten Sinema, oppose the use of procedural circumvention.
Manchin has also made it clear that he does not support a 28% corporate tax rate, although Psaki said on Thursday that Biden was not ready to completely abandon his efforts to raise corporate taxes.
It’s unclear exactly how Biden might move forward if the bipartisan talks fail, but Psaki added that Biden maintains his belief that companies should pay a larger sum for infrastructure.
She stressed that the president had “absolutely not” abandoned his broader goal of raising the corporate tax rate and only wanted to take it off the table for this round of negotiations aimed at attracting Republicans.
ABC News’ Justin Gomez, Molly Nagle, Trish Turner and Benjamin Siegel contributed to this report.
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