WHITE HOUSE, U.S. COMPANIES MAY AGREE ON 25% TAX RATE
President Joe Biden has championed raising the U.S. corporate tax rate to 28% from 21% as the main way to fund his $2 trillion infrastructure plan, but few people in Washington, including inside the White House, really think the rate will land there, Jarrett Renshaw reported for Reuters.
Biden made it clear on Wednesday that he is open to compromise after a reporter asked if he would be willing to agree on a tax rate below 28%. “I’m willing to listen to that, I’m wide open to it,” Biden said.
Reuters interviewed more than a dozen corporate and White House officials engaged in the infrastructure push. Most expect the White House and business groups to compromise on a 25% corporate tax rate - a level neither side would have chosen, but both can live with.
“We don’t like it, but we expect to be at 25 percent,” a lobbyist at a top US energy firm said, requesting anonymity. “If so, we are going to consider that a win.”
The US corporate tax rate dropped to 21% from 35% after the 2017 tax cut pushed by former President Donald Trump and his fellow Republicans, but many big US companies pay much less. Increasing what companies pay into the more than $4 trillion federal budget is an important part of Democrat Biden’s plan to restructure the US economy to reduce inequality and try to counter China’s rise.
US multinational companies including Alphabet Inc’s Google, Facebook Inc and Merck & Co are among several that have been adept at reducing their taxes, tax and legal experts said.
Amazon.com Inc supports a hike in the corporate tax rate here as part of an infrastructure overhaul, Jeff Bezos, chief executive of the largest US retailer, said on Tuesday.
Biden said last week that Amazon was one of 91 Fortune 500 companies that "use various loopholes where they pay not a single solitary penny in federal income tax," in sharp contrast to middle-class families paying over 20% tax rates.
Biden’s infrastructure and investment package includes roads and bridges and funding for affordable housing and eldercare workers, among other items. In addition to raising the corporate tax rate, the White House is pushing a minimum U.S. and global tax for companies, and increasing enforcement of tax laws, Treasury Secretary Janet Yellen said on Wednesday.