A proposed increase in the corporate tax rate won’t drive companies out of the United States, President Joe Biden said on April 5, as he vowed not to negotiate with Republicans over the higher rate.
Speaking to reporters after arriving on The Ellipse in Washington, Biden said there’s no evidence that increasing the rate to 28 percent will harm the economy or spur companies to look abroad.
“The tax was 36 percent, and it’s now down to 21 percent. The idea that that—it’s bizarre, we’re talking about a 28 percent tax that everybody thought was just fair enough for everybody,” he said.
“Here you have 51 or 52 corporations in the Fortune 500 that haven’t paid a single penny in taxes for three years? Come on, man. Let’s get real.”
Biden’s $2 trillion infrastructure plan includes raising the corporate tax rate from 21 percent, where it has been since former President Donald Trump’s 2017 tax cut slashed the rate from 35 percent.
Biden also wants to impose a 15 percent minimum tax on large companies. The tax increases would fully pay for the infrastructure plan in 15 years, the White House claims.
Republicans have largely opposed the proposal.
“What the president proposed this week is not an infrastructure bill. It’s a huge tax increase, for one thing. And it’s a tax increase on small businesses, on job creators in the United States of America,” Sen. Roger Wicker (R-Miss.), the ranking member on the Senate Commerce, Science, and Transportation Committee, said on NBC’s “Meet the Press” on April 4.
“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 will be very appealing to many Republicans,” added Senate Republican Leader Mitch McConnell (R-Ky.) in Kentucky on April 5.
One analysis found no evidence “of widespread benefits of any kind resulting changes in corporate behaviors” due to the lower corporate tax rate, although House Republicans said last year the rate cut spurred job creation and economic growth.
Biden could struggle to get enough votes for his package because even a single Democrat defection in the 50-50 Senate would kill the bill if Democrats decide to pursue the reconciliation route, cutting out the need to draw support from 10 Republicans.
Sen. Joe Manchin (D-W.Va.) said April 5 that he didn’t want to raise the corporate rate back to 28 percent, preferring a smaller increase to 25 percent.
“As the bill exists today, it needs to be changed,” Manchin said during a radio show. “If I don’t vote to get on it, it’s not going anywhere.
“There’s six or seven other Democrats who feel very strongly about this. We have to be competitive, and we’re not going to throw caution to the wind.”
White House press secretary Jen Psaki told reporters in Washington several hours later that the administration is “open to hearing ideas and proposals from members and we encourage them to put them forward.”
Transportation Secretary Pete Buttigieg said on April 4 that the administration’s plan would see corporations pay their “fair share at a rate, by the way, that would be lower than it’s been for most of my life.”