Biden offers to drop corporate tax hike during infrastructure negotiations with Republicans
Biden still committed to raising corporate taxes outside of infrastructure bill
Many businesses are worried President Biden's economic plan to raise taxes and minimum wage could hurt their companies. FOX Business' Grady Trimble with more.
President Biden offered to scrap his proposed corporate tax hike during negotiations with Republicans on an infrastructure plan, a source familiar with the matter said Thursday, as the two sides strive to strike a bipartisan deal.
The source told FOX Business that Biden is willing to drop a plan to raise the corporate tax rate to 28% from 21% – a move that would roll back a key part of the GOP 2017 tax overhaul – and instead offered to pay for the infrastructure plan by imposing a higher global minimum rate of 15% on U.S. companies' foreign earnings. In exchange, Republicans would have to agree to up their spending offer.
The person familiar with the matter cautioned that Biden has not changed his overall position about reversing the Trump-era Tax Cuts and Jobs Act and is still committed to raising the rates paid by corporations and wealthy Americans.
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"In the interest of reaching across the aisle and finding a practical agreement, in the context of these negotiations specifically, this was a solution he put forward," the person said.
The temporary concession by Biden comes as the two sides struggle to strike a deal on the next big economic spending package. Talks have dragged on for more than two months, with Republicans and Democrats still fiercely divided on how much should be spent on infrastructure – and how to pay for the new spending.
"This should be completely acceptable to a number of Republicans who have said their bottom line is leaving the 2017 tax law untouched," White House press secretary Jen Psaki said Thursday.
Biden has offered to slash his initial proposal of about $2.3 trillion to $1.7 trillion, while Republicans countered last week with a $928 billion proposal – which constitutes about $257 billion in new funding. (The remainder is part of an existing baseline plan for investments.) Republicans have called on the White House to pay for infrastructure by repurposing unspent coronavirus relief money, which they say amounts to about $750 billion.
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But the Biden administration has expressed that it would only be open to reallocating about $75 billion.
Despite the weeks of negotiations, there remains an ideological gulf between the two sides over what constitutes infrastructure. The GOP's plan notably does not include new spending on a wide range of areas where Biden has recommended billions, such as electric vehicles, elder care and veterans hospitals, frustrating some Democrats who want Biden to walk away from the talks.
With narrow majorities in the House and Senate, Democrats have the option to bypass Republicans and approve the measure on a party-line basis using a procedural tool known as budget reconciliation – a path that some progressives are pressuring Biden to take.
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There are some signs the Biden administration is opening to acting unilaterally to pass the American Jobs Plan: On Sunday, Transportation Secretary Pete Buttigieg said negotiations will continue in private this week, but he identified June 7 as an endpoint for possible deal-making.
"I think we are getting pretty close to a fish-or-cut-bait moment," Buttigieg said during an appearance on CNN’s "State of the Union."
FOX Business' Blake Burman and Fox News' Jacqui Heinrich contributed to this report