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White House tells Democrats that corporate tax hike unlikely in current bill -source

EconomyOct 20, 2021 09:25PM ET
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© Reuters. The sun sets behind the U.S. Capitol building in Washington, U.S., October 6, 2021. REUTERS/Leah Millis/Files

(Fixes figure in paragraph 7)

By Jarrett Renshaw

(Reuters) -The White House told Democratic lawmakers on Wednesday that a proposed hike in U.S. corporate taxes is unlikely to make it into their signature social spending bill, according to a congressional source familiar with the discussions.

President Joe Biden's plans to hike the corporate tax rate to 28% from 21%, a key campaign promise, are likely to be one of the steep concessions he makes to steer his economic revival package https://www.reuters.com/world/us/biden-democrats-2-trillion-spending-plan-what-is-what-is-cut-2021-10-20 through Congress, the White House disclosed in the private meeting with top Democrats.

"There is an expansive menu of options for how to finance the president's plan to ensure our economy delivers for hardworking families, and none of them are off the table," said White House spokesperson Andrew Bates.

Biden, his aides and congressional leadership are racing to close a deal as soon as this week on a set of tax hikes they hope will fund more than $1.75 trillion over a decade in programs ranging from childcare to eldercare, healthcare, affordable housing and climate change mitigation.

They have no margin for error because Democrats hold only narrow majorities in the House of Representatives and Senate. Republicans oppose the legislation.

"The president knows that he's not going to get everything he wants in this package," White House spokesperson Jen Psaki told reporters on Air Force One. "Nor will any member of Congress, probably, and that's what compromise is all about."

The original price tag for the social spending bill was $3.5 trillion.

Democrats hope to pass the measure in the Senate through a "reconciliation" process that requires support by only a simple majority rather than the 60 votes needed for most legislation in the evenly split 100-member chamber. Democratic Vice President Kamala Harris holds the tiebreaking vote.

Biden, who framed the 2020 election against Republican then-President Donald Trump as one between working-class Scranton, Pennsylvania, and Manhattan's Park Avenue, pitched the tax hike as an effort to make sure the wealthy and corporations pay their fair share. Trump and congressional Republicans cut corporate rates to 21% from 35% in 2017.

After taking office in January, Biden paired the tax hike with a mix of programs he has argued will put the United States on a more sustainable economic footing to compete with China, from universal pre-kindergarten to dental benefits for seniors and incentives to encourage a shift to low-carbon energy sources.

'EVERYBODY OUGHT TO BE PAYING SOMETHING'

Business groups and Republicans have fought the measures, arguing they will hamper the economy's recovery from the COVID-19 pandemic.

"When I ran for president, I came back to Scranton," Biden said on Wednesday on his first trip back to his birthplace since Election Day last November. "I resolved to bring Scranton values to bear, making fundamental shifts in how our economy works for working people, build the economy from the ground up ... and not from the top down."

Top Democrats may now put on the table alternate financing proposals for the bill that have been discussed for weeks, including imposing new levies on stock buybacks and business partnerships, according to a person familiar with the matter.

Kyrsten Sinema, a key swing-vote Democrat who has expressed the most concern about tax hikes, may be amenable to other measures that only raise rates for highly profitable large corporations paying next to nothing in federal taxes under current rules, according to Senate colleague Elizabeth Warren.

“Our problem is partly about too low a rate at the top, and obviously some Democrats disagree,” Warren, a Democrat, said on CNN. “But I think all the Democrats agree, by golly, everybody ought to be paying something.”

The S&P 500 closed 0.4% higher after the news about the White House's private comments was first reported by the Washington Post. After-hours trading in the U.S. stock index trended 0.3% higher.

White House tells Democrats that corporate tax hike unlikely in current bill -source
 

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Comments (8)
ZS Beck
ZS Beck Oct 20, 2021 10:57PM ET
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Great, No corporate tax, no tax on the wealthy, no new income to the government So Joe, how do you plan to finance the 3.5 T social spending????1 T infrastructure spending? I like to know before you approve it.
Frank Taylor
Frank Taylor Oct 20, 2021 10:18PM ET
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How can JoeB not understand that corporate costs are baked into the product and if it fails to be profitable it goes away, along with the jobs it provided.
James Andrews
James Andrews Oct 20, 2021 9:37PM ET
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As usual, the only ones paying more will be the working people. Only a child would have expected anything else, unfortunately millions got sold an impossible communist dream.
Sean Fuerstenberg
Sean Fuerstenberg Oct 20, 2021 9:36PM ET
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I don't understand why people are so jelly of the rich......Class envy.....get a life
Michael Angelo
Michael Angelo Oct 20, 2021 9:14PM ET
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The mummy finishes like Carter. Remember.
Jay Worley
Jay Worley Oct 20, 2021 7:27PM ET
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What? $1.9T in new, unnecessary, unpaid for debt? imagine that? What's next? No taxes on the rich? No way!
Me comment
Me comment Oct 20, 2021 6:41PM ET
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Total failure if they exclude the tax hikes on the rich and corporations.
Mike ND
Mike ND Oct 20, 2021 4:59PM ET
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The price of this bill is falling as fast as Bidens poll numbers
 
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