US president says he is open to negotiating corporate tax increases to pay for $2 trillion in new public investments.
President Joe Biden says he is open to compromise with Republicans in Congress on his $2-trillion infrastructure plan to create jobs and boost the economy [/Kevin Lamarque/Reuters]
US President Joe Biden announced he will meet Republicans in Congress next week to open bipartisan negotiations with lawmakers on his proposed $2-trillion-plus infrastructure plan.
“It’s not a plan that tinkers around the edges. It’s a once in a generation investment in America,” Biden said in remarks at the White House in Washington, DC, on Wednesday.
“The divisions of the moment should not stop us from doing the right thing for the future,” Biden said on the same day his Treasury Department released a new tax plan to help pay for the proposed jobs program.
Biden’s $2-trillion infrastructure package would invest in bridges, highways, water treatment, electric power, rural internet and new projects to address floods and wildfires.
The Democratic president is pitching it to the public as a vehicle for creating jobs for 19 million Americans, including many now out of work who do not have college degrees.
The president also cast it as an investment in the US’s global competitiveness, particularly versus China which is racing ahead, he said.
“Do you think the rest of the world is waiting around? Do you think China is waiting around?” Biden asked rhetorically.
“They are not waiting but they are counting on American democracy to be too slow, too limited and too divided to keep pace,” he warned.
Treasury Secretary Janet Yellen issued a plan on Wednesday to raise taxes on US multinational corporations to help pay for Biden’s infrastructure proposal [File: Jonathan Ernst/Reuters]In Congress, Senate Republican Leader Mitch McConnell has come out against Biden’s plan calling it a “Trojan horse” for Democratic-backed social welfare spending and excessive tax increases.
Biden holds an upper hand in negotiations with Republicans because Democrats, who control both chambers of Congress, can pass another big spending bill this year without Republican votes.
Biden is proposing to raise the corporate income tax to 28 percent, from 21 percent set under the previous Trump administration. Too many US companies use loopholes in the tax code to pay zero taxes, he said.
“We’ve got to pay for this. There are many other ways to do it. I’m open to negotiate this,” Biden said, reiterating he would not raise taxes on the majority of middle-class citizens earning less than $400,000 a year.
Separately, the Biden Treasury Department is proposing a global minimum corporate tax for nations around the world and to eliminate tax havens and deductions companies use to shift jobs and profits overseas, he said.
The Treasury’s “Made in America Tax Plan” released on Wednesday aims to raise revenue from US multi-national corporations that presently pay on average 7.8 percent in taxes on income, according to the plan (pdf).
The president said he would order the IRS to ramp up enforcement against corporations who fail to report income.
Senator Chris Coons, a Democratic ally of Biden’s, said on Wednesday getting Republican support for Biden’s plan would be a challenge but that a number of GOP senators have expressed a willingness to go along with a smaller infrastructure package.
Democratic Senator Chris Coons, a political ally of President Biden, says some Republicans may support a smaller infrastructure package [File: Demetrius Freeman/Pool via Reuters]“There is an opportunity here for us to come together around a smaller package and by smaller, I mean hundreds of billions of dollars that is directly targeted in hard infrastructure,” Coons told Punchbowl News, a congressional news outlet.
McConnell concurred Wednesday afternoon, the Reuters news agency reports, telling reporters in Kentucky, “If we could agree on what the definition of infrastructure is – and I think it clearly must include roads and bridges and broadband – there may be a way forward. But it needs to be credibly paid for, not through” reversing the Trump 2017 tax cuts.
At the same time, Biden must also satisfy the progressive wing of the Democratic Party that wants to see even greater public investment than the $2 trillion he has proposed.
White House officials are hoping emphasis on projects to fight climate change will draw support from progressive legislators. Environmental groups are getting behind Biden’s plan which includes funding for new electric vehicles and alternative energy projects in solar and wind.