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Saturday, Feb 22, 2025

Biden softens on corporate tax hike, saying it could be set between 25% and 28%

Biden softens on corporate tax hike, saying it could be set between 25% and 28%

"What I'm proposing is badly needed and able to be paid for and still grow," Biden said in a speech. "Trickle-down ain't working very well, man."

In an address in Louisiana, President Joe Biden said the corporate tax rate should be between 25% and 28% — a potential sign of compromise with moderate Democrats.

Biden had proposed a 28% corporate tax rate, an increase from its current rate of 21%, to offset his planned infrastructure spending. The rate was slashed from 35% in former President Donald Trump's 2017 tax law.

"That's a couple hundred billion dollars," Biden said of upping the rate. "We can pay for these things. I'm not talking about deficit spending."

He added: "What I'm proposing is badly needed and able to be paid for and still grow. Trickle-down ain't working very well, man."

Biden has previously signaled he's open to compromising on the corporate tax rate, but he's also defended the 28% level, and hasn't explicitly mentioned 25% as realistic before. In a prior speech when he said the 35% rate was too high, he added that he was "sick and tired of ordinary people being fleeced."

"What I'm proposing is that we meet in the middle: 28%. Twenty-eight percent — we'll still have lower corporate rates than any time between World War Two and 2017," Biden said. "It will generate over $1 trillion in taxes over 15 years."

Moderate Democrats like Joe Manchin have indicated they favor a 25% corporate tax rate


Sen. Joe Manchin, a pivotal vote for the Democrats' razor-thin Senate majority, has made it clear that he favors more of a 25% rate. In an interview with Talkline, a West Virginia radio show, Manchin said the rate should have never gone below 25%.

"That's the worldwide average," he said. "And that's what basically every corporation would have told you was fair."

Sen. Mark Warner (D-Va.) has also expressed his hesitations, telling NBC that he wouldn't "wouldn't go as far as 28% on the corporate rate."

Axios reported that Senate Democrats were likely to pursue a 25% corporate tax rate, which would not offset the entire cost of Biden's proposed spending. It would, however, bring moderates like Manchin into the fold — and potentially get them on board with another party-line vote.

Biden also discussed a similar rate in a bipartisan infrastructure meeting in April. He said in Thursday's speech that he'd be meeting with his "Republican friends" to discuss the plan. However, Senate Minority Leader Mitch McConnell (R-Ky.) has said that revisions to the 2017 tax bill are off limits, and has drawn a red line at $600 billion in infrastructure spending.

But, while Biden said he's open to compromise, he's not ready to do nothing: "I'm not ready to have another period where America has another infrastructure month and doesn't change a damn thing."

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