It looks like your browser is not up to date.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Biden softens on corporate tax hike, saying it could be set between 25% and 28%

In an address in Louisiana, President Joe Biden said the corporate tax rate should be between 25% and 28%.

Article originally published by Business Insider. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

  • On Thursday, Biden said the corporate tax rate should be raised to between 25% and 28%.
  • He previously proposed 28% to offset infrastructure spending, but some Democrats have balked at that.
  • Biden's comments signal he may be open to compromise with moderate party members.

In an address in Louisiana, President Joe Biden said the corporate tax rate should be between 25% and 28% - a potential sign of compromise with moderate Democrats.

Biden had proposed a 28% corporate tax rate, an increase from its current rate of 21%, to offset his planned infrastructure spending. The rate was slashed from 35% in former President Donald Trump's 2017 tax law.

"That's a couple hundred billion dollars," Biden said of upping the rate. "We can pay for these things. I'm not talking about deficit spending."

He added: "What I'm proposing is badly needed and able to be paid for and still grow. Trickle-down ain't working very well, man."

Biden has previously signaled he's open to compromising on the corporate tax rate, but he's also defended the 28% level, and hasn't explicitly mentioned 25% as realistic before. In a prior speech when he said the 35% rate was too high, he added that he was "sick and tired of ordinary people being fleeced."

"What I'm proposing is that we meet in the middle: 28%. Twenty-eight percent - we'll still have lower corporate rates than any time between World War Two and 2017," Biden said. "It will generate over $1 trillion in taxes over 15 years."

Moderate Democrats like Joe Manchin have indicated they favor a 25% corporate tax rate

Sen. Joe Manchin, a pivotal vote for the Democrats' razor-thin Senate majority, has made it clear that he favors more of a 25% rate. In an interview with Talkline, a West Virginia radio show, Manchin said the rate should have never gone below 25%.

"That's the worldwide average," he said. "And that's what basically every corporation would have told you was fair."

Sen. Mark Warner (D-Va.) has also expressed his hesitations, telling NBC that he wouldn't "wouldn't go as far as 28% on the corporate rate."

Axios reported that Senate Democrats were likely to pursue a 25% corporate tax rate, which would not offset the entire cost of Biden's proposed spending. It would, however, bring moderates like Manchin into the fold - and potentially get them on board with another party-line vote.

Biden also discussed a similar rate in a bipartisan infrastructure meeting in April. He said in Thursday's speech that he'd be meeting with his "Republican friends" to discuss the plan. However, Senate Minority Leader Mitch McConnell (R-Ky.) has said that revisions to the 2017 tax bill are off limits, and has drawn a red line at $600 billion in infrastructure spending.

But, while Biden said he's open to compromise, he's not ready to do nothing: "I'm not ready to have another period where America has another infrastructure month and doesn't change a damn thing."


This article was written by insider@insider.com (Juliana Kaplan) from Business Insider and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.


Newsroom: our daily email

Sign up to receive the daily headlines that matter to investors.


Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.

    Loading

    Your postcode ends:

    Not your postcode? Enter your full address.

    Loading

    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    Article originally published by Business Insider. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

    Free news email alerts

    • Daily and weekly news
    • Major Publishers
    Register