By Trevor Hunnicutt
President Joe Biden said a corporate tax rate between 25% and 28% could help pay for badly needed infrastructure, suggesting he could accept a lower rate than what he has proposed in his search for Republican support for the funding.
“The way I can pay for this, is making sure that the largest companies don’t pay zero, and reducing the (2017 corporate) tax cut to between 25 and 28” percent, Biden said during a visit to Lake Charles, Louisiana.
In his $2.3 trillion infrastructure plan, the Democratic president initially proposed raising the corporate tax rate from 21% to 28%. Tax experts and congressional aides told Reuters in April that a 25% rate would be a likely compromise.
“What I’m proposing is badly needed” and will be paid for, Biden said.
“Trickle-down ain’t working very well,” he said, referring to the theory that helping businesses and the wealthy will benefit those further down the economic ladder. “We’ve got to build from the bottom up and the middle out.”
The U.S. corporate tax rate dropped to 21% from 35% after the 2017 tax cut pushed by then-President Donald Trump and his fellow Republicans, but many big U.S. companies pay much less.
Increasing what companies pay into the more than $4 trillion federal budget is an important part of Biden’s plan to restructure the U.S. economy to reduce inequality and to try to counter China’s rise.
Biden’s stop in Lake Charles was part of his “Getting America Back on Track Tour” to promote a $2.25 trillion infrastructure spending plan and a $1.8 billion education and childcare proposal.
His push to spend more federal money on schools, roads, job training and other public works, and to tax the wealthiest Americans and companies to pay for it, is popular with voters of both parties. But the plans face stiff opposition from Republican lawmakers.
The White House is betting trips like this will build public support for Biden and his spending proposals, even among Republican voters who backed Trump, who continues to hold enormous sway over his party.
Congressional Republicans oppose Biden’s proposed $2.25 trillion in infrastructure spending over a decade, saying the higher taxes that would be levied on corporations to fund it would cost jobs and slow the economy.
The U.S. economy has boomed under higher levels of corporate taxation, such as the 1960s and the 1990s.
In the closely divided Senate, Biden would need every Democratic vote if no Republicans support the bill. Biden said in Lake Charles he was meeting with Republicans in Congress to see “how much they’re willing to go for, what they think are the priorities, and what compromises” they can offer.
“I’m ready to compromise,” Biden said. “I’m not ready to have another period where America has another ‘Infrastructure Month’ and doesn’t change a damn thing.”
Some Republicans have offered a far smaller package: $568 billion, focused on roads, bridges, broadband access and drinking water improvements. However, much of that reflects money the federal government is already expected to spend for that infrastructure.
U.S. Senate Minority Leader Mitch McConnell predicted last week that Biden’s infrastructure and jobs plan would not get support from Republican lawmakers.
“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell said in an event in his home state of Kentucky last month.