President Joe Biden indicated last week that he is willing to compromise on a corporate rate as low as 25%.
When asked specifically about whether a 25% rate would be acceptable, he said: “I’m open to compromising, yes. It doesn’t have to be exactly what I say.” Later in the week he specifically referenced making sure corporations pay a rate between 25% and 28%.
The wiggle room on the corporate rate is no surprise. With razor-thin majorities in the House and Senate, Biden will have to compromise with moderates on many issues to pass any tax bill. Corporate rate, and the capital gains rate, will be ripe for negotiation.
Biden has so far been less willing to entertain dropping revenue offsets altogether. Treasury Secretary Janet Yellen has expressed openness to deficit-financing some of the economic and infrastructure agenda, but Biden is stating publicly for now that he does not want to add to the deficit.
Democrats are still just beginning what is expected to be a long legislative process. More information will be released when Treasury issues its full report on tax legislative proposals, which is currently scheduled for May 28.
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