White House tells Democrats that corporate tax hike is unlikely in current bill – source

The sun sets behind the United States Capitol in Washington, United States on October 6, 2021. REUTERS / Leah Millis / Files

Oct. 20 (Reuters) – The White House told Democratic lawmakers on Wednesday that a proposal to raise corporate taxes in the United States would likely not appear in their social spending bill, according to a source in the Congress close to discussions.

President Joe Biden’s plan to raise the corporate tax rate to 28% from 21%, a key campaign pledge, will likely be one of the important concessions he makes to steer his economic stimulus package through of Congress, the White House revealed in the private meeting. with the best Democrats.

The White House declined to comment.

Biden, his aides and congressional leaders are rushing to strike a deal as early as this week on a series of tax hikes that they hope will fund more than $ 1.75 trillion over a decade in new programs ranging from child care to senior care, health care, affordable housing and climate. mitigation of change.

They have no margin for error because Democrats hold only a slim majority in the House of Representatives and the Senate. Republicans oppose the legislation.

“The president knows he won’t get everything he wants out of this package,” White House spokeswoman Jen Psaki told reporters on Air Force One. “No member of Congress either, probably, and that’s the point of the compromise.”

Biden, who pitched the 2020 election against then-Republican President Donald Trump, between working-class Scranton, Pa., And Park Avenue in Manhattan, presented the tax hike as an effort to ensure that the rich and the corporations pay their fair share. Trump and Republicans in Congress cut corporate rates to 21%, from 35% in 2017.

After taking office in January, Biden associated the tax hike with a mix of programs that he says will put the United States on a more sustainable economic footing to compete with China, from universal preschools to dental benefits for children. older people and incentives to encourage a switch to low-carbon energy sources.

Business groups and Republicans fought the measures, saying they would hamper the recovery of the economy after the COVID-19 pandemic.

Top Democrats can now put on the table other funding proposals for the bill that have been under discussion for weeks, including imposing new levies on share buybacks and business partnerships, according to a person close to the bill. case.

The S&P 500 (.SPX) closed 0.4% higher after news of the White House private comments was first reported by the Washington Post. After-hours trading in the US stock index rose 0.3%.

Reporting by Jarrett Renshaw; Additional reports by Nandita Bose; Writing by Trevor Hunnicutt; Editing by Leslie Adler and Peter Cooney

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