Biden proposes minimum 15% corporate tax, revises infrastructure spending to $1 trillion

U.S. President Joe Biden recommended scrapping the proposed corporate tax hike during negotiations with Republicans, The Washington Post reported, citing people familiar with the matter.

Biden offered a new minimum corporate tax rate of 15% for the companies with lots of tax credits and deductions, dropping the previous plan of 28%, which was aimed at dozens of profitable U.S. companies that pay little to nothing to the federal government annually. The revision would be a significant concession by the President to win Republican support on a broader infrastructure deal.

Biden also proposed leveling up enforcement on corporations and wealthy individuals relying on loopholes to reduce tax burdens, the WaPo report said.

In the new proposal of around a $1.7 trillion budget, the federal government plans to invest $80 billion in the Internal Revenue Service (IRS), the White House expects it to raise an additional $700 billion over a decade.

The government is also planning to drop subsidies on fossil fuels to save $121 billion over the next ten years and would impose a new vehicle-miles-traveled fee on commercial trucks.

In return, Republicans would have to agree to at least $1 trillion in new infrastructure expenditure, a source told Reuters.

“He is personally leaning in, willing to compromise, spending time with senators - Democrat and Republican - to find out what is the art of the possible,” Commerce Secretary Gina Raimondo told CNN in an interview on Thursday.

“The only thing he won’t accept is inaction,” she said. “It has to be big and bold, $1 trillion or more.”

Biden initially proposed an infrastructure package of $2.25 trillion, paid for by raising taxes from wealthiest individuals in the U.S. and increasing corporate taxes from 21% to 28%.

Picture Credit: FT