Biden offers to keep 2017 tax cuts as a concession
President would work to close tax loopholes
WASHINGTON – In a concession to Republicans, President Joe Biden proposed that instead of raising the corporate tax rate to pay for a bipartisan infrastructure package totaling at least $1 trillion, they’d work to ensure corporations don’t exploit tax loopholes.
The president still supports raising corporate taxes to cover other parts of his agenda.
Biden’s infrastructure counteroffer, proposed to Republican senators this week, would keep intact 2017 tax cuts that they oppose unwinding, calling it a “red line” in their negotiations with the White House.
The tweaked proposal would no longer raise the corporate tax rate from 21% to 28%, relying on other funding components of Biden’s American Jobs Plan: beefing up tax enforcement on the country’s wealthiest earners and ensuring the largest corporations – some of which have avoided paying any taxes – pay at least a minimum of 15%.
“This should be completely acceptable to a number of Republicans who have said that their bottom line is they want to keep the 2017 tax law untouched,” White House press secretary Jen Psaki said Thursday.
Psaki made clear that Biden has not abandoned his push to increase the corporate tax rate to pay for proposals such as a $1.8 trillion families plan that includes subsidized child care and national prekindergarten.
“What the president believes is that corporations can afford to pay a little bit more,” Psaki said. “And that’s a way we can pay for a range of the bold proposals that he has put forward.”
Biden’s offer, first reported by The Washington Post, was made during a private one-on-one meeting Wednesday with Sen. Shelley Moore Capito, RW.Va., the lead negotiator for a group of six Republicans seeking a deal on infrastructure with the White House.
Biden signaled he wants at least $1 trillion in spending on infrastructure in addition to $400 billion in baseline spending already approved for infrastructure needs.
Capito’s Senate office declined to comment on the president’s offer.
Biden reduced the cost of his American Jobs Plan to $1.7 trillion from $2.25 trillion last month to get closer to an amount Republicans could support. In their counterproposal last week, Republicans upped their offer to $928 billion from $586 billion. Their proposal contains $290 billion on top of baseline funds.
Psaki did not say whether Biden is willing to go below $1 trillion. “We’re going to keep optionality on the table,” she said.
Republicans said they are willing to pay for only physical infrastructure such as repairs to roads, bridges and airports, as well as broadband expansion. Biden has stayed committed to “social infrastructure” such as proposing $400 billion to overhaul caregiving for the elderly and people with disabilities in addition to traditional infrastructure.
The White House expressed concerns that the GOP counteroffer has little or no funding for fixing Veterans Affairs hospitals, rail and transit systems, replacing the nation’s lead pipes and investing in clean energy jobs.
The House Transportation and Infrastructure Committee will begin drafting legislation Wednesday for surface roadway funding that could complement Biden’s proposal.
Psaki called next week “an important moment in the timeline,” noting that House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., have said they want to approve infrastructure legislation by the summer. Psaki stopped short of calling next week a deadline to reach a deal.
“We’re not here to set new deadlines,” Psaki said.