WASHINGTON, June 3 (Reuters) – US President Joe Biden has offered to drop his plans to raise corporate taxes during negotiations with Republicans, two sources familiar with the matter said Thursday in what would be a major concession from the Democratic president as he works to secure an infrastructure deal.
Biden proposed to drop plans to raise corporate tax rates up to 28% and instead set a minimum tax rate of 15% to ensure all businesses pay taxes, have indicated sources.
In return, Republicans are expected to agree to at least $ 1 trillion in new infrastructure spending, a source said. And Biden hasn’t given up on seeking up to $ 1.7 trillion.
With the change, funding for the plan would rely heavily on increased tax enforcement, the removal of inheritance tax breaks for wealthy families as well as other sources like $ 75 billion in COVID-relief funds. 19 unspent, a source said.
Biden’s 15% tax floor seeks to prevent large multinational companies like Amazon.com Inc (AMZN.O) from paying little or no tax in the United States. Currently, many of these companies show large profits on tax returns, but shift their responsibility to more tax-efficient countries.
White House spokeswoman Jen Psaki said Biden’s proposal “should be very acceptable” to Republicans who wish to leave corporate tax cuts in place in 2017, he said. she declared. âWe’re open to other options,â Psaki said, as long as they don’t raise taxes for people earning less than $ 400,000.
The Biden alternative assumes $ 1.7 trillion in revenue over 15 years to pay for the new spending over eight years.
The funds would include $ 700 billion from strengthened enforcement of existing taxes, $ 200 billion from the end of a capital gains tax break on large inheritances and $ 75 billion from non-COVID-19 funds. spent. The rest would come from other proposals, including ending some fossil fuel subsidies, a new commercial truck mileage charge, and the 15% corporate minimum tax.
Biden’s original plan called for $ 2.25 trillion in infrastructure spending and new revenue, including $ 857.8 billion from the previous proposal to raise corporate taxes from 21% to 28%.
“He leans personally, is ready to compromise, spends time with senators – Democrats and Republicans – to find out what the art of the possible is,” Commerce Secretary Gina Raimondo told CNN on Thursday.
“The only thing he won’t accept is inaction,” she said. “He’s got to be big and daring, $ 1,000 billion or more.”
Biden has a previously scheduled meeting with Republican Senator Shelley Moore Capito, the party’s top infrastructure negotiator, on Friday.
In an appearance in Kentucky, Senate Minority Leader Mitch McConnell said, “We still hope we can come to an agreement on a fully paid and important infrastructure package.”
He added that the talks are focused on “maybe $ 1 trillion”. “I don’t know if we are going to come to an agreement or not,” he said.
Reporting by Jarrett Renfrew; Writing by Doina Chiacu; Editing by Susan Heavey
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