NEW YORK, June 3 (Reuters) – US President Joe Biden has offered to drop his plan to raise corporate taxes by 28% during negotiations with Republicans over an infrastructure package, two sources said Thursday close to the matter, in what would be a major concession from the Democratic president as he struggles to strike a deal.
Biden proposed instead setting a minimum tax rate that companies would have to pay at 15%, sources said. In return, Republicans are expected to agree to at least $ 1 trillion in new infrastructure spending, against the president’s initial proposal for a $ 2.25 billion package.
The S&P 500 (.SPX) cut modest losses on the news and was at 0.23% for the last time.
INVESTOR / ANALYST COMMENTS
RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY
This added an upward movement in the market. Investors would feel better faced with some sort of compromise that would allow the infrastructure package and the tax packages to pass. The alternative is the possibility of a much more extreme package voted only by the Democrats, and the country is looking for some kind of a compromise position. It also allows the government to work … The majority of investors would like us to make some sort of compromise with maybe a moderate tax proposal that will not hold back the economy. growth in the economy and a spending proposal that will not completely eliminate the deficit. “
THOMAS HAYES, PRESIDENT AND EXECUTIVE MEMBER, GREAT HILL CAPITAL LLC, NEW YORK
“It was that headline that really made a difference, the possibility that the corporate tax rate would certainly be lower than the proposed 28% and potentially not at all, although I would find that surprising to say the least.
“The market was sort of stuck on something in the middle – 25%, somewhere in there – but that has a huge direct impact on profits, and if that’s correct, that’s probably why you got it. seen the big turnaround about an hour since.
“There is a greater likelihood that Democrats will pass whatever they want. While Biden wants to make it sound like there is a bipartisan outcome, the likelihood of the two sides reuniting and compromising each other, especially when one side has no real reason to do so, is highly unlikely.
“If I were a Republican in Congress right now, I would just be like, ‘What the hell are we doing? We should just be playing golf, why are we doing these moves? “
GARY BRADSHAW, PORTFOLIO MANAGER, HODGES CAPITAL MANAGEMENT, DALLAS
“I think this is definitely positive news. He talked about raising corporate tax rates and sort of unraveling what Trump had done. To set those rates at 15%, I think it would be great for the market, if they could do that and take some uncertainty out there. “
“I think the market has reacted. It was broken down and then turned green.
“The headlines sound positive to me. “
ROB SECHAN, CEO AND CO-FOUNDER, NEWEDGE WEALTH, NEW YORK
“Anything better than expected will certainly help the market and the tax structure has now gone from a headwind to a tailwind.”
Compiled by the Global Finance & Markets Breaking News team