The way is open for infrastructure talks to lower the rise in corporation tax

According to people familiar with the negotiations, Joe Biden is willing to let go of demands to raise the U.S. corporate tax rate.

The concession granted by the US president aims to boost the bilateral agreement on the bid to finance an additional $ 1 billion over the cost of renovating roads, bridges and broadband networks across the country over the next two decades.

The U.S. president wanted to fund the plan primarily by raising the corporate income tax rate from 21 percent to 28 percent, but Republicans oppose it, saying it would hurt the economy and, in part, undermine Donald Trump’s signature tax. cuts.

At a meeting on Wednesday in a negotiation with West Virginia Senator and Chief Republican negotiator Shelley Moore Capito, Biden said he was ready to suspend the insistence on raising corporate income taxes in favor of a bilateral agreement.

But he proposed that the expenditure on new infrastructure be financed by the Internal Revenue Service for the enactment of the wealth tax law. And it wants to impose a 15 percent minimum tax on companies so that they don’t take advantage of loopholes that end up paying very little or nothing.

“This does not mean that he is rejecting his general position [Trump tax cuts] and wealthy taxpayers and corporations or their general plans, “said a well-known person in the talks.” But… in the interest of reaching the passage and reaching a practical agreement, specifically in the context of these negotiations, it was the solution he proposed. “

Biden’s move came before the self-imposed deadline next week to allow Republicans to move forward with infrastructure negotiations or to leave them and try to leave the package with the Democratic majority in Congress.

The U.S. president is expected to “reconnect” with Capito on Friday to discuss the status of talks, according to the White House.

Biden’s decision to suspend the bid to raise the corporate income tax may be provisional and may be limited to Republican negotiations only. If the U.S. president ends up negotiating an additional spending package with Democrats alone, the rise in corporate income tax may be on the table again.

Still, the steps taken by the president, first reported by the Washington Post, highlight the political difficulty of pushing for revenue increases in the face of the entire Republican opposition. The U.S. president also aims to increase taxes on wealth and dividends individually to fund his economic agenda.

The concessions made by the U.S. President in the Republican negotiation relate to internal taxes, and are separate from international corporate tax reform proposals.

Globally, Biden is seeking a commitment from other nations to set a minimum tax of 15 percent, avoid taxation and eliminate incentives to shift profits to low-tax nations.

A breakthrough in global fiscal policy could be made in the coming days when G7 finance ministers meet in London to discuss the US plan, possibly setting the stage for a broader agreement at the OECD and G20 levels.

The Biden infrastructure plan, which was finalized in late March, has a value of $ 2.3 million, but during talks with Capito, it has gradually lowered its target as the Republican side has risen to the point where it is willing to spend.

A possible compromise can be found with a price tag of less than $ 1 thousand, but it is still unclear whether the two sides will like it.