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Biden says no evidence higher corporation taxes will drive companies abroad

President Joe Biden defended his proposal to raise corporate taxes to help pay for his infrastructure spending plans

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Joe Biden | US economy | Globalisation

Reuters  |  WASHINGTON 

Joe Biden

By Andrea Shalal

WASHINGTON (Reuters) - President 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 harm the economy and that there was no evidence it would drive business abroad.

Speaking to reporters in Washington after spending Easter weekend at the Camp David presidential retreat in Maryland, Biden again took aim at the 50 or 51 corporations on the Fortune 500 list that paid no taxes at all for three years, saying it was time for them to pay their share.

Asked if raising the corporate tax rate to 28% from 21% would drive away corporations, Biden said: "Not at all ... there's no evidence of that."

Biden's predecessor, Donald Trump, and Republican lawmakers cut the corporate rate to 21% in 2017 from 35%. Trump repeatedly promised to tackle the nation's crumbling infrastructure during his presidency but never delivered on that.

Biden's plans have drawn criticism from both Republicans and Democrats, including Democratic Senator Joe Manchin, whose support could be critical to ensuring passage in a Senate split evenly between the two parties.

White House press secretary Jen Psaki told reporters the Democratic president was open to discussions with Republicans and Democrats about how to fund the proposed investments.

Asked if the administration had analyzed the cost of agreeing to a lower corporate tax rate of 25%, the highest Manchin says he would accept, Psaki noted the 28% rate would be lower than it was at any time since World War Two.

"Combined with the other tax proposals, it would pay for the totality of the package. That's why he felt it was a responsible proposal to make," Psaki said of Biden.

"There will be different ideas for pay-fors, there will be different ideas for tax proposals. That will all need to be weighed … with leaders in Congress."

FOCUS IN REDUCING INEQUITIES

The U.S. Chamber of Commerce, the largest U.S. business group, last month called Biden's proposed hike in corporate taxes "dangerously misguided" and warned it would "slow the economic recovery and make the U.S. less competitive globally."

But the International Monetary Fund backed the overall idea of richer countries 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 focused heavily on addressing racial and gender inequities, said other countries were investing billions of dollars in infrastructure, and the United States needed to do so as well to boost its competitiveness.

"I'm going to push as hard as I can to change the circumstances so we can compete with the rest of the world," he said. "Everybody else in the rest of the world is investing in infrastructure and we're going to do it here."

Biden pushed back at Republican criticism that his plan is filled with items unrelated to infrastructure.

He listed clean water, schools and high-speed rail as key items 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 secure Republican backing for his plan, but if that failed to happen, he would likely support using a procedural strategy called reconciliation to allow Democrats to pass it by a simple majority in the Senate.

Senate Republican leader Mitch McConnell said last week that Biden's infrastructure plan was "bold and audacious" but would raise taxes and increase debt. He vowed to fight it "every step of the way."

 

(Reporting by Andrea Shalal; Writing by Andrea Shalal and Tim Ahmann; Editing by Aurora Ellis and Peter Cooney)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, April 06 2021. 08:03 IST
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