Biden will increase the minimal company tax of 15% to fund infrastructure

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Biden increases the minimum corporate tax of 15% to fund infrastructure

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President Joe Biden introduced Republicans to the idea of ​​a 15% minimum tax on US businesses and increased enforcement efforts by the IRS to fund a bipartisan infrastructure package.

The proposal sets aside the Biden government's proposal to increase the corporate income quota from 21% to 28% – a non-starter for Republican lawmakers – although this could be pursued elsewhere. White House press secretary Jen Psaki confirmed the offer during a June 3 briefing.

Under the pitch for the Republicans, businesses that have lots of tax credits and withholding would have to pay at least 15%. The plan would also increase tax revenues by conducting more audits on wealthy taxpayers.

These two support measures were already included in Biden's tax plans. The White House sees the offer as raising money without raising tax rates or withdrawing President Donald Trump's 2017 tax cuts, which Republicans have called a red line in the negotiations. The Washington Post previously reported the proposal as part of a $ 1 trillion spending offer.

Biden met with Senator Shelley Moore Capito, the West Virginia Republican who leads infrastructure talks for the GOP, on June 2 in the latest attempt at compromise. The discussion did not result in an agreement on how much to spend or pay, but the two spoke by phone on June 4th. Capito's office released a statement with few details except that the two “agreed to reconnect on Monday. ”

Biden had previously made a $ 1.7 trillion infrastructure proposal to the Republicans. Removing a 28% increase in corporate income tax from the table for these discussions would eliminate Treasury Department revenue to $ 857.8 billion over a decade.

The IRS enforcement plan, which is expected to raise $ 778.8 billion, along with the $ 148.3 billion from the 15% minimum tax, would offset a total of about $ 927.1 billion in infrastructure spending, based on estimates of the Treasury, released last week.

The Democrats could pursue different tax plans in a law to reconcile the parties later this year.

Stressed that the 15% corporate income tax was included in Biden's American Jobs Plan and proposed budget, Psaki said the president was "absolutely not" giving up efforts to raise the corporate tax rate to 28%. She described the latest offer as an attempt to find a way forward in this particular negotiation with the Republicans.

"This is a way for him to identify pieces that he has long been a proponent of," said Psaki. "That should be perfectly acceptable to Republicans who want to leave the 2017 tax law intact," she said.

Biden is also open to reallocating around $ 75 billion in funds left over from coronavirus alleviation laws passed in 2020, Psaki said.

But progressive Democrats have expressed their dismay at reports that negotiations may be heading towards what they consider to be an unacceptable compromise.

“If what we've read is true, I would find it very difficult to endorse this bill. Two trillion dollars was already the compromise. President Biden can't expect us to vote for an infrastructure deal dictated by the Republican Party, ”New York City Congressman Jamaal Bowman, a new member of Congress, said in a statement.

The 15% minimum tax targets situations where large tech companies like Amazon.com Inc., Netflix Inc., and Zoom Video Communications Inc. were largely able to avoid paying federal income taxes despite making a profit in a few years because they took advantage of legal maneuvers , including business expense depreciation to cut their tax bill.

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