Infrastructure week continues
Biden's new $1 trillion infrastructure offer reportedly swaps in 15 percent minimum corporate tax for tax hike
President Biden didn't just lower the proposed price tag for his American Jobs Plan to $1 trillion, from $1.7 trillion, in a Wednesday meeting with Sen. Shelley Moore Capito (R-W.Va.), the GOP point person on infrastructure negotiations. He also said he's open to dropping his proposal to fund the bill by raising the corporate tax rate to 28 percent, from 21 percent, The Wall Street Journal and The Washington Post report, citing people familiar with the talks. Instead, the package would create a new 15 percent minimum corporate tax rate.
Republicans insist any bipartisan infrastructure bill not touch their 2017 $1.5 trillion tax cut package, their crowning legislative achievement of the past decade. A 15 percent minimum tax wouldn't technically change that 2017 law, and according to a White House document from earlier this year, only about 180 of the largest U.S. corporations would qualify for the minimum tax and just 45 would have to pay, the Journal reports.
"Corporations have paid a declining share in federal taxes since the 2017 GOP tax law dramatically slashed the corporate tax rate," the Post reports, and 55 Fortune 500 corporations paid no federal income tax in 2020, according to the left-leaning Institute of Taxation and Economic Policy. Biden's minimum tax proposal was originally part of a second package, the American Families Plan, and the White House says Biden is still committed to raising the corporate tax rate through other legislation, if need be.
The latest GOP offer is $257 billion in new infrastructure spending over eight years, plus clawed-back COVID-19 relief funds and increased user fees and gas taxes. Biden reportedly offered to include about $75 billion in repurposed coronavirus funds in the package. Biden and Capito are scheduled to talk again on Friday, and "Republican leaders are still deciding whether to put forward another counteroffer or to walk away from the negotiations entirely," the Post reports.
Progressive groups, convinced Republicans will ultimately vote against any package and frustrated at the slow pace and concessions by Biden, hope Republicans walk away, letting Democrats pass their own bill through budget reconciliation. "We are rooting for them to be dumb," one top consultant to several progressive groups tells Politico. "If they were smart they would take it. They'd box Biden in on it. And, not just that, he would legitimately be fine with it. And the left would be livid."