Biden Officially Proposes Corporate Tax Rate Compromise... "25-28% Would Help Secure Funding"

"China is eating up our lunch"
Republicans continue negotiations over corporate tax rates

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] U.S. President Joe Biden emphasized the urgent need for the passage of the infrastructure investment bill and publicly stated that he could compromise on the corporate tax rate at around 25%, lower than his original pledge of 28%, to secure funding for the bill. This is interpreted as a compromise proposal in response to pressure from the U.S. Republican Party, which opposes a sharp increase in corporate taxes and may block the passage of the infrastructure investment bill itself.

According to foreign media including CNN on the 6th (local time), President Biden said in a speech held in Lake Charles, Louisiana, "I think raising the corporate tax rate to about 25-28% would help secure funding for the infrastructure investment bill." He publicly hinted that he could compromise at a level about 3% lower than the 28% increase pledge he made during his presidential campaign.

President Biden is believed to have proposed a compromise because the Republican Party opposed the infrastructure investment bill itself, arguing that the corporate tax increase was excessive. The Republican Party is reportedly negotiating with the Democratic Party over the corporate tax rate increase issue. The U.S. corporate tax rate was 35% during the Barack Obama administration but was lowered to 21% when the Donald Trump administration took office.

Earlier, President Biden announced large-scale stimulus plans including a $2.25 trillion (about 2,500 trillion won) job and infrastructure investment plan and a $1.8 trillion (about 2,020 trillion won) "American Families Plan." The main funding source is expected to come from tax increases such as raising corporate taxes. However, the Republican Party has consistently opposed this. Senate Minority Leader Mitch McConnell pressured by saying that the two bills proposed by President Biden would not gain a single Republican vote, arguing that the corporate tax increase rate is excessive.

Seemingly aware of this Republican opposition, President Biden emphasized in his speech the aging of the Calcasieu River Bridge visible behind him and stressed that it is time for massive investment in infrastructure maintenance. The bridge, opened in 1951, is 70 years old this year and has been left unattended 20 years beyond its structural lifespan. President Biden said, "This bridge is a perfect example of how much we have ignored investment in our economy and the future of our people as a nation," and added, "We have failed to invest properly in infrastructure for half a century."

He continued, "China is eating our lunch. Economically, they are eating our lunch," and stressed, "If this continues, they will own the global electric vehicle market. We must compete." He emphasized that the longer infrastructure investment is delayed, the more likely the U.S. is to lose in competition with China, underscoring the urgent need for the infrastructure investment bill to be passed as soon as possible.