Biden pitches minimum tax over corporate rate hike


President Joe Biden offered to fund a bipartisan infrastructure package with his 15% minimum tax proposal instead of a corporate rate increase to try and jumpstart negotiations with Republicans.

Republicans and the administration have narrowed their differences somewhat on a potential bipartisan bill after GOP negotiators agreed to increase their spending offer to $1 trillion, but the sides remain far apart on the funding options. Republicans have so far refused to entertain tax increases, particularly any increase in corporate rates. Biden appears to be offering his minimum tax on book income instead in an attempt to break the stalemate.

The Treasury “Green Book” describes his proposal as a 15% minimum tax on worldwide financial statement income for corporations with book income of more than $2 billion. Net operating losses, general business tax credits and foreign tax credits would be allowed in full. Any liability could be carried forward and used against regular tax as a credit in future years.

It is not clear whether Biden would seek to expand this minimum tax to corporations below the $2 billion threshold as part of a bipartisan agreement. The administration is also currently proposing at least a 15% rate for a broader international agreement on a global minimum tax with the Organization for Economic Cooperation and Development (OECD).

A bipartisan agreement on infrastructure without an increase in the corporate rate would not necessarily take it or other tax increases off the table. Democrats could try a two-track approach, agreeing on a smaller bipartisan package with Republicans while moving tax increases and other partisan priorities separately on a reconciliation bill. Democrats, however, could have trouble keeping their caucus together on a separate partisan package that doesn’t carry the most popular physical infrastructure investments.



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