Biden is ready to drop his demands for a US corporate tax rate if enough Republicans agree to support infrastructure spending growth, say people familiar with the talks.
The concession by the US President is aimed at catalyzing a bipartisan agreement, with his proposal to finance more than $ 1 ton of additional spending over the next decade on the modernization of roads, bridges and broadband networks throughout the country.
The US president wanted to finance the program mainly by raising the corporate income tax rate from 21% to 28%, but the Republicans are strongly opposed to it, arguing that it would harm the economy and partially remove the signature tax on Donald Trump. cuts.
Biden said he was ready to drop his claim of a corporate income tax increase in favor of a bipartisan deal in a meeting with Republican Sen. Shelley Moore Capito, a Republican in West Virginia, on Wednesday.
But he suggested that new infrastructure spending should be financed by more aggressive tax legislation imposed on wealthy households by the Internal Revenue Service. And he wants to impose a 15 percent minimum tax on businesses so that they can not take advantage of the gaps that mean they end up paying very little or nothing at all.
“It does not mean that he supports his common position on this issue [Trump tax cuts] rich taxpayers and corporations or its general plans, ”said someone familiar with the negotiations. “But, out of interest in going through the corridor to find a practical agreement, particularly in the context of these negotiations, this was his proposed solution.”
Biden’s move came ahead of next week’s self-imposed deadline to continue talks with Republicans on infrastructure, or to cut them off – to try to pass the package using the narrow Democratic majority of waffles in Congress.
The US President is expected to “contact” Capito on Friday to discuss the talks.
Biden’s decision to reject the corporate income tax increase can only be temporary – limited to Republican negotiations. If the US president just finishes negotiating the additional spending package with the Democrats, the corporate income tax increase is likely to return to the table.
The president’s move, first reported by the Washington Post, underscores the political difficulty of boosting any revenue growth in the face of full Republican opposition. The US President also intends to increase the personal taxes of the rich, including capital gains and dividends, to finance his economic agenda.
The concessions made by the President of the United States in the negotiations of the Republicans refer to the domestic taxes and are separated from his proposals for international tax reforms.
Globally, Biden seeks to compromise with other nations to impose a 15 percent minimum tax to remove tax evasion incentives and shift profits to low-income countries.
Progress in global tax policy could come in the coming days, when the G7 finance ministers meet in London to discuss the US program, possibly creating a broader deal at the OECD և G20 level.
Biden’s infrastructure plan, developed in late March, is $ 2.3. Dollars, but during negotiations with Capito, he gradually lowered his goal as the Republican side moved up in terms of how much he was willing to spend.
A possible trade-off can be found for less than $ 1t, but it is not clear which side will like it.