Manchin Says He Won’t Back Biden’s 28% Corporate Tax Rate

By Yuval Rosenberg

Manchin Says He Won’t Back Biden’s 28% Corporate Tax Rate

President Joe Biden’s $2.25 trillion infrastructure plan is
already running into some roadblocks, with Republicans making clear
they oppose it — and some Democrats now indicating they’ll seek
significant changes.

Biden faces pushback from his own party: Progressives
want Biden to spend more and expand his plan further. Sen. Bernie
Sanders (I-VT)
told CNN on Sunday that Biden had made a “serious
proposal” but added that “a lot more work has to be done” to
address what he and the White House call “human infrastructure.”
Sanders indicated he’d want more money to address climate change
and more done to lower health care costs.

Centrists have their own qualms about Biden’s plan. Biden has
proposed raising the corporate tax rate to 28%, up from the 21% set
by the 2017 Republican tax overhaul but lower than the 35% rate
that had been in place before. Sen. Joe Manchin (D-WV) said Monday
that the president’s proposal “needs to be changed” and that he
wouldn’t support a 28% rate. Manchin said he would back a rate of
25%.

As Democrats sought to pass their $1.9 trillion Covid rescue
package last month, Manchin flexed his muscle as a key vote in the
evenly divided Senate, pushing for concessions he wanted on
enhanced unemployment benefits. His comments Monday indicate he’s
prepared to do the same on the infrastructure plan.

“If I don’t vote to get on it, it’s not going anywhere. So we’re
going to have some leverage here," he said in an interview with
West Virginia Metro News’s “Talkline” show. But Manchin added that
other Democrats share his concern about the proposed corporate tax
rate. “There’s six or seven other Democrats who feel very strongly
about this,” he said.

Sen. Mark Warner (D-VA) also
told reporters Monday that he has some concerns
about the Biden plan and expects to have more input into the
package.

Republicans suggest “much more modest” approach:
Republicans, meanwhile, are making what Associated Press
Congressional Correspondent Lisa Mascaro calls a “politically
brazen bet that it’s more advantageous to oppose” the president’s
plan. “Republicans are intent on saddling Democrats with
responsibility for all the taxes and spending to come, much as they
did the 2009 rescue after the economic crisis, framing it as
government overreach that piles on debt,” Mascaro
writes.

Senate Minority Leader Mitch McConnell (R-KY) told reporters
Monday that Biden's plan is “something we’re not going to do.” He
said his party could back a “much more modest” plan that isn’t paid
for by corporate tax hikes.

Sen. Roy Blunt (R-MO), a member of Senate Republican leadership,
told
“Fox News Sunday” that Biden could win GOP support
if he scaled back his plan by about 70% and focus a roughly $615
billion package on roads, bridges, ports, airports and perhaps
water systems and broadband.

"I think there’s an easy win here for the White House if they
would take that win, which is make this an infrastructure package
which is about 30% — even if you stretch the definition of
infrastructure some — about 30% of the $2.25 trillion they're
talking about spending," Blunt said.

Blunt suggested the package could be paid for through taxes on
infrastructure usage, such as gasoline taxes and levies aimed at
electric and driverless vehicles, or other options agreed to on a
bipartisan basis. Blunt added that the White House could then
follow up that “easy victory” on infrastructure with a more
partisan package addressing other elements of Biden’s plan that
Democrats could try to pass on their own.

The White House said Monday that Biden is prepared to negotiate
with Manchin and others on how to pay for the package. “He knows
some will come forward with different ways to pay for this package,
and some may have views that it shouldn’t be paid for at all,”
Press Secretary Jen Psaki said.

But Biden shows no signs of being willing to dramatically slash
his plan to satisfy Republicans. On Monday, he told reporters he
will “push as hard as I can” for the plan to position the United
States to better compete with other countries. "Everybody around
the world is investing billions and billions of dollars in
infrastructure, and we’re going to do it here,” he said.

Biden had indicated Friday that he thinks voters will see the
benefit of his plan and could pressure GOP lawmakers to back it: “I
think the Republicans’ voters are going to have a lot to say about
whether we get a lot of this done.”

Dozens of Major Corporations Paid No Federal Income Taxes in
2020: Report

At least 55 large corporations paid no federal corporate income
taxes in 2020, according to a new
analysis by the Institute on Taxation and Economic
Policy.

The companies in the analysis had more than $40 billion in
pre-tax income and would have paid about $8.5 billion in taxes at
the current 21% corporate tax rate. But none of those taxes were
collected, and the companies instead received roughly $3.5 billion
in rebates, bringing the total for tax breaks for the group to $12
billion.

“This continues a decades-long trend of corporate tax avoidance
by the biggest U.S. corporations,” ITEP said, adding that “it
appears to be the product of long-standing tax breaks preserved or
expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the
CARES Act tax breaks enacted in the spring of 2020.”

Some examples from the report:

* FedEx had $1.2 billion in U.S. pretax income in 2020 but paid
no tax while receiving a rebate of $230 million.

* Nike paid no taxes on roughly $2.9 billion of U.S. pretax
income last year, while receiving a $109 million tax rebate.

* Salesforce paid no federal income taxes on $2.6 billion
of U.S. income.

Yellen Calls for Global Minimum Corporate Tax

Saying that governments need “stable tax systems that raise
sufficient revenue to invest in essential public goods and respond
to crises,” Treasury Secretary Janet Yellen made the case for a
global minimum corporate tax rate Monday.

In a speech
delivered to the Chicago Council on Global Affairs, Yellen called
on the world’s major economies to end a “30-year race to the bottom
on corporate tax rates” in which governments slash rates to attract
globe-hopping businesses. As an alternative, Yellen said she is
working with G20 nations on an agreement to impose a minimum tax
rate across borders to create “a more level playing field in the
taxation of multinational corporations.”

Yellen’s remarks come as the Biden administration seeks to
increase corporate tax rates in the U.S., which some critics say
could motivate businesses to shift profits to lower-tax countries.
A Treasury official told
Reuters that while the U.S. would use its own laws
to prevent multinationals from shifting profits in pursuit of lower
rates, it’s important for countries to limit the practice by
working together to establish common rules. The U.S. is also
involved in talks led by the Organization for Economic Cooperation
and Development with about 140 countries to develop a global tax
minimum.

A declaration of US leadership: Yellen’s speech marked a
change in course from the previous administration, Bloomberg’s
Saleha Mohsin and Christopher Condon
report, signaling an end to the go-it-alone
isolationism practiced by President Trump. “America first must
never mean America alone,” Yellen said. “A lack of global
leadership and engagement makes our institutions and economy
vulnerable.”

Yellen will participate this week in the spring meetings
of the International Monetary Fund and World Bank, during which the
global minimum tax will be on the agenda. In addition, the finance
leaders will discuss cooperation on a variety of issues, including
the fiscal response to the Covid-19 pandemic, combating climate
change and reducing global poverty, with the U.S. taking a leading
role in accordance with what the Biden administration sees as its
values and interests. “With few exceptions,” Yellen said, “stable
and prosperous economies tend to be less of a security threat to
the United States.”

Democrats Propose Tax Overhaul for Multinationals

As Yellen kicks off an effort to establish a global minimum tax
rate, a trio of Democratic senators led by Finance Committee
Chairman Ron Wyden (OR) have released a
plan to overhaul the tax system for U.S.
multinational corporations as part of an effort to generate
revenues to help pay for President Biden’s infrastructure plan.

Co-authored by Sens. Sherrod Brown (D-OH) and Mark Warner
(D-VA), the proposal calls for raising the tax rate on offshore
profits and beefing up penalties for firms that shift profits
overseas to avoid U.S. taxes.

“The international tax system should focus on rewarding
companies that invest in the U.S. and its workers, stop
incentivizing corporations to shift jobs and investment abroad, and
ensure that big corporations are paying their fair share,” the
proposal says. “Not only would these reforms make our international
tax system better, they can raise revenue necessary to invest in
America.”

The proposal touches on what The Wall Street Journal
calls the three main elements of the U.S.
international tax system: a minimum tax rate, rules to inhibit
shifting profits, and benefits for exporters.

Although Wyden did not provide specific tax rates or revenue
projections, similar plans have been estimated to raise billions of
dollars from multinationals, The New York Times’ Jim Tankersley and
Alan Rappeport
report.

John Oliver Asks How Worried We Should Be About
the 'Undeniably Big' National Debt

HBO’s “Last Week Tonight with John Oliver” dedicated the bulk of
Sunday night’s episode to an in-depth look at the $28 trillion
national debt, which Oliver called “an absolute f--- ton of
money.”

"The truth is, our national debt is undeniably big, and between
the trillions in coronavirus stimulus bills and the infrastructure
plans [President Joe] Biden unveiled just this week, it's poised to
get even bigger, and Republicans in particular seem outraged by
that," Oliver said.

The host then explained the difference between deficits and debt
and ran through some 40-plus years of tax and debt politics, all
with the stated objective of trying to clarify how the national
debt works, "how valid concerns about it are, and how we should
think about it moving forward." Oliver slammed debt fearmongering
and explained how mainstream economic thinking has shifted in
recent years given the persistence of low interest rates in the
face of ever-growing debt.

"Going into debt can actually be a good investment for the
country," Oliver said. "Essentially, as economists will tell you,
the key question is: Are you spending money on the right
things?"

You can watch the whole 22-minute segment here
(it includes a Nicolas Cage pillow, a “Bridgerton” comparison and,
of course, some f-bombs and other NSFW language — hey, it’s not TV,
it’s HBO). But the key takeaway from Oliver’s argument is this:

"There is a good-faith debate to be had over how to handle our
national debt over the long term. But right now, most economists
actually agree, with interest rates at historic lows, the question
shouldn't really be 'How much debt are we taking on?' as much as,
‘What is the value of what we are getting for it in return?’
…
“Look, no one credible is saying that deficits don’t mater or
that we should borrow as if the sky is the limit. What they are
saying is the debate shouldn’t be about whether debt is good or
bad. It should be about whether the investments that we are making
are worth it or not.”

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