Many companies fear that President Biden’s economic plan to increase taxes and the minimum wage could harm their businesses. Grady Trimble from FOX Business with more.
President Biden offered to cancel his proposed corporate tax increase while negotiating an infrastructure plan with Republicans, a source familiar with the matter said Thursday as the two sides seek to reach a bipartisan deal.
The source told FOX Business that Biden was ready to drop a plan to increase the corporate tax rate from 21% to 28% – a move that would take back an important part of the 2017 GOP tax reform – and instead offered it for infrastructure payable by introducing a higher global minimum rate of 15% on foreign profits of US companies. In return, Republicans would have to agree to increase their spending offer.
The person familiar with the matter warned that Biden has not changed his overall position on repealing the Trump-era Tax Cuts and Jobs Act and continues to advocate raising the tax rates paid by businesses and wealthy Americans.
COMPARISON OF THE REPUBLICAN INFRASTRUCTURE PLAN ($ 928 BILLION) TO THE BIDEN: WHAT’S IN EACH PROPOSAL?
“In the interest of getting down to business and reaching a practical agreement, especially in the context of these negotiations, this was a solution that he proposed,” the person said.
The temporary concession from Biden comes as both sides struggle to reach an agreement on the next big stimulus package. Talks have dragged on for more than two months, with Republicans and Democrats still deeply divided over how much to spend on infrastructure – and how to pay for the new spending.
“This should be perfectly acceptable to a number of Republicans who have said their bottom line is without prejudice to the 2017 tax law,” White House press secretary Jen Psaki said Thursday.
Biden has offered to cut his original proposal from about $ 2.3 trillion to $ 1.7 trillion, while Republicans countered last week with a proposal of $ 928 billion – representing about 257 new funding Billions of dollars. (The remainder is part of an existing baseline investment plan.) Republicans have asked the White House to pay for infrastructure by reallocating unspent coronavirus aid money, which they believe comes to about $ 750 billion.
WHAT BIDEN’S CAPITAL GAINS TAX PROPOSAL COULD MEAN FOR YOUR WALLET
However, the Biden administration has said it would only be open to a reallocation of around $ 75 billion.
Despite the weeks of negotiations, an ideological rift remains between the two sides over infrastructure. In particular, the GOP’s plan does not include new spending on a variety of areas where Biden has recommended billions, such as electric vehicles, elderly care, and veterans hospitals, frustrating some Democrats who want Biden to leave the talks.
With narrow majorities in the House and Senate, the Democrats have the option of bypassing the Republicans and approving the measure on a party basis using a procedural tool known as budget reconciliation – a path some Progressive Biden are pushing.
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There are some signs that the Biden administration will act unilaterally to pass the American employment plan: On Sunday, Transportation Secretary Pete Buttigieg said negotiations would continue privately this week, but he identified Jan.
“I think we’re getting pretty close to a fish-or-cut-bait moment,” Buttigieg said during an appearance on CNN’s State of the Union.
Blake Burman of FOX Business and Jacqui Heinrich of Fox News contributed to this report