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Joe Biden is willing to set aside his demands to raise the U.S. corporate tax rate if there are enough Republicans to agree to support an increase in infrastructure spending, according to people familiar with the negotiations.
The U.S. president’s grant aims to catalyze a bipartisan deal on his bid to fund more than $ 1 billion in additional spending over the next decade to upgrade roads, bridges and broadband networks across the country.
The U.S. president wanted to fund the plan primarily with an increase in corporate income tax from 21% to 28%, but Republicans strongly oppose it, saying it would hurt the economy and partially develop it. Donald Trump’s signature tax. cuts.
In a meeting with Shelley Moore Capito, a West Virginia senator and chief Republican negotiator in the negotiations, this Wednesday, Biden said he was willing to let go of his insistence on raising corporate income tax interest. of a bipartisan agreement.
But he proposed that new spending on infrastructure should be funded by a more aggressive tax law enforcement by the Internal Revenue Service for wealthy households. And it wants to impose a minimum tax of 15% on companies so that they can’t take advantage of the loopholes that mean they end up paying very little or nothing.
“This does not mean that he is abandoning his general positions on the [Trump tax cuts] and wealthy taxpayers and corporations or their general plans, “said one person familiar with the talks.” But… with an interest in getting down the aisle and finding a practical agreement, in the context of these negotiations specifically , this was a solution he proposed ”.
The Biden measure was brought forward to next week’s self-imposed deadline to proceed with negotiations with Republicans on infrastructure or to abandon them and try to pass the package using Democratic minorities in Congress.
According to the White House, the U.S. president will “reconnect” with Capito on Friday to discuss the status of the talks.
Biden’s decision to withdraw his bid for a corporate income tax increase can only be temporary and limited to Republican negotiations. If the U.S. president ends up negotiating an additional spending package only with Democrats, an increase in corporate income tax is likely to be on the table again.
Still, the president’s move, first reported by the Washington Post, highlights the political difficulty of overcoming revenue increases in the face of full Republican opposition. The U.S. president also intends to raise individual taxes on the rich, including capital gains and dividends, to fund his economic agenda.
The concessions made by the President of the United States in the Republican negotiation relate to national taxes and are separate from his international corporate tax reform proposals.
On the global front, Biden is seeking a commitment with other nations to set a minimum tax of 15% to eliminate incentives for tax evasion and the transfer of profits to low-tax countries.
A breakthrough in global fiscal policy could come in the coming days when G7 finance ministers meet in London to discuss the U.S. plan, possibly laying the groundwork for broader agreement at OECD and G20 levels. .
Biden’s infrastructure plan, set in late March, is worth $ 2.3 million, but over the course of talks with Capito, it has been lowering its target as the Republican side has advanced in terms of the amount. which he is willing to spend.
A possible compromise could be found with a price tag of just over $ 1 billion, but it’s still unclear if either party would find it so enjoyable.
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