President Joe Biden had proposed a 28% corporate tax rate, an increase from its current rate of 21%, to offset his plannedinfrastructure spending. The rate was slashed from 35% in former President Donald Trump’s 2017 tax law.
Biden has said, “What I’m proposing is that we meet in the middle: 28%. Twenty-eight percent – we’ll still have lower corporate rates than any time between World War Two and 2017,” Biden said. “It will generate over $1 trillion in taxes over 15 years.”
But on Thursday in his address in Louisiana, President Joe Biden said the corporate tax rate should be between 25% and 28% – a potential sign of compromise with moderate Democrats. If he is already having to compromise with his own party, then that means his plan is too high.
Biden also discussed a similar rate in a bipartisan infrastructure meeting in April. He said in Thursday’s speech that he’d be meeting with his “Republican friends” to discuss the plan. However, Senate Minority Leader Mitch McConnell (R-Ky.) has said that revisions to the 2017 tax bill are off limits, and has drawn a red line at $600 billion in infrastructure spending.
Also, Senator Joe Manchin (D-WV), and several other Democrats are looking at 25% as the rate they would possibly be comfortable with. Manchin, the former West Virginia governor, and senior senator, is a pivotal vote for the Democrats’ razor-thin Senate Majority. Manchin has made it clear that he favors more of a 25% rate.
In an interview with Talkline, a West Virginia radio show, Manchin said, “The rate should have never gone below 25%. That’s the worldwide average and that is basically what every corporation would have told you was fair.”
Sen. Mark Warner (D-Va.) has also expressed his hesitations, telling NBC that he wouldn’t “wouldn’t go as far as 28% on the corporate rate.”
Axios reported that Senate Democrats were likely to pursue a 25% corporate tax rate, which would not offset the entire cost of Biden’s proposed spending. It would, however, bring moderates like Manchin into the fold – and potentially get them on board with another party-line vote.
If Biden has to compromise down to 25%, a rate that won’t bring in enough revenue to pay his infrastructure plan, it seems he might be trying to pull a fast one on the American people. Actually, he already is, as approximately 94% of the funding in his plan is not really classifiable as infrastructure.