White House tells Democrats that corporate tax hike unlikely in current
bill
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[October 21, 2021]
By Jarrett Renshaw
(Reuters) -The White House told Democratic
lawmakers on Wednesday that a proposed hike in U.S. corporate taxes is
unlikely to make it into their signature social spending bill, according
to a congressional source familiar with the discussions.
President Joe Biden's plans to hike the corporate tax rate to 28% from
21%, a key campaign promise, are likely to be one of the steep
concessions he makes to steer his economic revival package https://www.reuters.com/world/us/biden-democrats-2-trillion-spending-plan-what-is-what-is-cut-2021-10-20
through Congress, the White House disclosed in the private meeting with
top Democrats.
"There is an expansive menu of options for how to finance the
president's plan to ensure our economy delivers for hardworking
families, and none of them are off the table," said White House
spokesperson Andrew Bates.
Biden, his aides and congressional leadership are racing to close a deal
as soon as this week on a set of tax hikes they hope will fund more than
$1.75 trillion over a decade in programs ranging from childcare to
eldercare, healthcare, affordable housing and climate change mitigation.
They have no margin for error because Democrats hold only narrow
majorities in the House of Representatives and Senate. Republicans
oppose the legislation.
"The president knows that he's not going to get everything he wants in
this package," White House spokesperson Jen Psaki told reporters on Air
Force One. "Nor will any member of Congress, probably, and that's what
compromise is all about."
The original price tag for the social spending bill was $3.5 trillion.
Democrats hope to pass the measure in the Senate through a
"reconciliation" process that requires support by only a simple majority
rather than the 60 votes needed for most legislation in the evenly split
100-member chamber. Democratic Vice President Kamala Harris holds the
tiebreaking vote.
Biden, who framed the 2020 election against Republican then-President
Donald Trump as one between working-class Scranton, Pennsylvania, and
Manhattan's Park Avenue, pitched the tax hike as an effort to make sure
the wealthy and corporations pay their fair share. Trump and
congressional Republicans cut corporate rates to 21% from 35% in 2017.
After taking office in January, Biden paired the tax hike with a mix of
programs he has argued will put the United States on a more sustainable
economic footing to compete with China, from universal pre-kindergarten
to dental benefits for seniors and incentives to encourage a shift to
low-carbon energy sources.
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The sun sets behind the U.S. Capitol building in Washington, U.S.,
October 6, 2021. REUTERS/Leah Millis/Files
'EVERYBODY OUGHT TO BE PAYING SOMETHING'
Business groups and Republicans have fought the measures, arguing
they will hamper the economy's recovery from the COVID-19 pandemic.
"When I ran for president, I came back to Scranton," Biden said on
Wednesday on his first trip back to his birthplace since Election
Day last November. "I resolved to bring Scranton values to bear,
making fundamental shifts in how our economy works for working
people, build the economy from the ground up ... and not from the
top down."
Top Democrats may now put on the table alternate financing proposals
for the bill that have been discussed for weeks, including imposing
new levies on stock buybacks and business partnerships, according to
a person familiar with the matter.
Kyrsten Sinema, a key swing-vote Democrat who has expressed the most
concern about tax hikes, may be amenable to other measures that only
raise rates for highly profitable large corporations paying next to
nothing in federal taxes under current rules, according to Senate
colleague Elizabeth Warren.
“Our problem is partly about too low a rate at the top, and
obviously some Democrats disagree,” Warren, a Democrat, said on CNN.
“But I think all the Democrats agree, by golly, everybody ought to
be paying something.”
The S&P 500 closed 0.4% higher after the news about the White
House's private comments was first reported by the Washington Post.
After-hours trading in the U.S. stock index trended 0.3% higher.
(Reporting by Jarrett Renshaw; Additional reporting by Nandita Bose;
Writing by Trevor Hunnicutt; Editing by Leslie Adler and Peter
Cooney)
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