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

The sun sets behind the United States Capitol in Washington, United States on October 6, 2021. REUTERS / Leah Millis / Files

Oct. 20 (Reuters) – The White House told Democratic lawmakers on Wednesday that a proposal to raise corporate taxes in the United States would likely not appear in their social spending bill, according to a source in the Congress close to discussions.

President Joe Biden’s plans to raise the corporate tax rate to 28% from 21%, a key campaign pledge, are likely one of the steep concessions he is making to steer his economic stimulus package through the through Congress, the White House revealed in the private meeting. with the best Democrats.

The White House declined to comment.

Biden, his aides and congressional leaders are rushing to strike a deal as early as this week on a series of tax hikes that they hope will fund more than $ 1.75 trillion over a decade in programs ranging from child care to senior care, health care, affordable housing and climate change. mitigation.

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

“The president knows he won’t get everything he wants out of this package,” White House spokeswoman Jen Psaki told reporters on Air Force One. “No member of Congress either, probably, and that is the reason for the compromise.”

Biden, who pitched the 2020 election against then-Republican President Donald Trump, between working-class Scranton, Pa., And Park Avenue in Manhattan, presented the tax hike as an effort to ensure that the rich and the corporations pay their fair share. Trump and Republicans in Congress cut corporate rates to 21%, down from 35% in 2017.

After taking office in January, Biden associated the tax hike with a mix of programs that he says will put the United States on a more sustainable economic footing to compete with China, from universal preschools to dental benefits for children. older people and incentives to encourage a switch to low-carbon energy sources.

‘EVERYBODY PAYS SOMETHING’

Business groups and Republicans fought the measures, saying they would hamper the recovery of the economy after the COVID-19 pandemic.

“When I ran for president, I came back to Scranton,” Biden said Wednesday on his first trip to his hometown since Election Day last November. “I decided to apply the values ​​of Scranton, to make fundamental changes in the way our economy works for workers, to build the economy from the bottom up… not from the top down.”

Top Democrats can now put on the table other funding proposals for the bill that have been under discussion for weeks, including imposing new levies on share buybacks and business partnerships, according to a person close to the bill. case.

Kyrsten Sinema, a key Democrat who has expressed the most concerns about tax hikes, may be in favor of other measures that raise rates only for large, highly profitable companies that pay next to nothing in federal taxes under current rules, according to Senate colleague Elizabeth. Warren.

“Part of our problem is with a rate that’s too low at the top, and obviously some Democrats don’t agree,” Warren, a Democrat, told CNN. “But I think all Democrats agree, damn it, everyone should pay something.”

The S&P 500 (.SPX) closed 0.4% higher after news of the White House private comments was first reported by the Washington Post. After-hours trading in the US stock index rose 0.3%.

Reporting by Jarrett Renshaw; Additional reports by Nandita Bose; Writing by Trevor Hunnicutt; Editing by Leslie Adler and Peter Cooney

Our Standards: Thomson Reuters Trust Principles.


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