WASHINGTON (Reuters) – President Joe Biden on Monday defended his proposal to raise corporate taxes to help pay for his infrastructure spending plans, saying he was not worried the hike would hurt the economy and that there was no evidence that it would lead to overseas business.
Speaking to reporters in Washington after spending Easter weekend at the presidential retreat at Camp David in Maryland, Biden again targeted the 50 or 51 Fortune 500 companies that paid no tax for three years, saying it was time for them to pay their share.
When asked if raising the corporate tax rate to 28% from 21% would scare businesses away, Biden replied, “Not at all… there is no evidence of that.”
Biden’s predecessor Donald Trump and Republican lawmakers cut the corporate rate to 21% in 2017, from 35%. Trump has repeatedly vowed to tackle the country’s crumbling infrastructure during his presidency, but never kept his promises.
Biden’s plans have drawn criticism from Republicans and Democrats, including Democratic Senator Joe Manchin, whose support could be key to securing passage into a equally divided Senate between the two parties.
White House press secretary Jen Psaki told reporters the Democratic president is open to discussions with Republicans and Democrats on how to finance the proposed investments.
When asked if the administration had analyzed the cost of accepting a 25% lower corporate tax rate, the top Manchin replied that he would agree, Psaki noted that the rate 28% would be lower than it has ever been since World War II.
“Combined with the other tax proposals, it would pay the entire package. That’s why he felt it was a responsible proposition to make, ”Psaki said of Biden.
“There will be different ideas for the payments, there will be different ideas for the tax proposals. All of this will have to be weighed… with the leaders of Congress. “
FOCUS ON REDUCING INEQUALITY
The United States Chamber of Commerce, America’s largest business group, last month called Biden’s corporate tax hike proposal “dangerously misguided” and warned that it “would slow down the economy. economic recovery and make the United States less competitive globally ”.
But the International Monetary Fund has backed the broad idea that richer countries are using taxes to reduce inequalities exposed by the COVID-19 pandemic, including progressive income taxes, inheritance and property taxes. , and taxes on “excess” corporate profits.
Biden, whose agenda is heavily focused on tackling racial and gender inequalities, said other countries are investing billions of dollars in infrastructure, and the United States must do so to boost its competitiveness as well. .
“I will push as hard as I can to change the circumstances so that we can compete with the rest of the world,” he said. “Everyone in the rest of the world is investing in infrastructure and we’re going to do it here. “
Biden fended off Republican criticism that his plan is filled with items unrelated to infrastructure.
He listed clean water, schools and high-speed rail as key elements that also counted as infrastructure, in addition to more traditional projects such as bridges, highways and roads.
Energy Secretary Jennifer Granholm said on Sunday that Biden would prefer to gain Republican support for his plan, but if that didn’t happen he would likely support the use of a procedural strategy called reconciliation to allow Democrats to adopt it by simple majority in the Senate.
Republican Senate Leader Mitch McConnell said last week that Biden’s infrastructure plan was “bold and daring,” but would raise taxes and increase debt. He vowed to fight it “every step of the way”.
Reporting by Andrea Shalal; Written by Andrea Shalal and Tim Ahmann; Editing by Aurora Ellis and Peter Cooney