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

The sun sets behind the US Capitol in Washington, USA, October 6, 2021. REUTERS / Leah Millis / Files

Oct. 20 (Reuters) – The White House told Democratic lawmakers on Wednesday that a proposed increase in U.S. corporate taxes is unlikely to be included in their social spending signature law, according to a Congressional source familiar with the discussions.

President Joe Biden’s plans to raise the corporate tax rate from 21% to 28%, a major election promise, are likely one of the steep concessions he is making to steer his stimulus package through Congress, the White House announced in the private session with top democrats.

“There is an extensive menu of options to fund the president’s plan to ensure our economy benefits hard-working families, and none of them are off the table,” said White House spokesman Andrew Bates.

Biden, his aides, and the congressional leadership are working hard this week to close a deal on a series of tax hikes that they hope will translate into more than $ 1.75 trillion in programs from childcare to geriatric care to health care over a decade , affordable housing to finance climate change will mitigate.

You have no margin for error because the Democrats in the House of Representatives and Senate only have narrow majorities. Republicans reject the law.

“The president knows he won’t get everything he wants in this package,” White House spokeswoman Jen Psaki told Air Force One reporters. “Probably no member of Congress will do that either, and that is what compromise is about.”

The original price of the social spending was $ 3.5 billion.

The Democrats hope to pass the move in the Senate through a “reconciliation process” that will only require a simple majority rather than the 60 votes required for most laws in the 100-member chamber. Democratic Vice President Kamala Harris holds the tie.

Biden, who shaped the 2020 election against Republican then-President Donald Trump as one between the working class of Scranton, Pennsylvania and Manhattan’s Park Avenue, proposed the tax hike to ensure the rich and corporate pay their fair share. Trump and the Republicans in Congress cut corporate rates from 35% in 2017 to 21%.

After taking office in January, Biden combined the tax hike with a mix of programs that he argued would put the United States on a more sustainable economic footing to compete with China, from universal pre-kindergartens to senior and dental services Incentives to encourage a switch to low carbon energy sources.

“EVERYONE HAS TO PAY SOMETHING”

Business groups and Republicans have fought the measures, arguing that they will hinder the economy from recovering from the COVID-19 pandemic.

“When I ran for president, I returned to Scranton,” said Biden on Wednesday on his first trip back to his birthplace since election day last November. “I set out to bring Scranton’s values ​​to life, to make profound changes in the way our economy works for the working people, to build the economy from the ground up … not top-down.”

Top Democrats can now table alternative funding proposals for the bill that has been debated for weeks, including the introduction of new taxes on share buybacks and business partnerships, according to a person familiar with the matter.

Kyrsten Sinema, a key Democrat who has voiced the greatest concern about tax hikes, may be amenable to other action, which Senate colleague Elizabeth said. only raise the rates for highly profitable corporations that pay next to nothing in federal taxes under the current rules Labyrinth.

“Part of our problem is under-rate at the top, and obviously some Democrats disagree,” 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’s private commentary was first published by the Washington Post. After-hours trading in the US stock index trended 0.3% higher.

Reporting by Jarrett Renshaw; Additional coverage from Nandita Bose; Letter from Trevor Hunnicutt; Editing by Leslie Adler and Peter Cooney

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