WASHINGTON — President Joe Biden on Wednesday indicated he is open to compromise on his administration’s proposal to increase the U.S. corporate tax rate to fund $2 trillion in infrastructure projects.
"Debate is welcome. Compromise is inevitable. Changes to my plan are certain," Biden said in a speech at the White House hours after his administration released an 18-page proposed tax code rewrite aimed at generating funding for his infrastructure and jobs plan.
A week after unveiling his sweeping proposal to modernize the country’s roads, railways and bridges, Biden detailed how his administration looks to pay for the eight-year project. The proposed tax plan calls for increasing the corporate tax rate to 28% from 21%, and increasing the tax rate of corporate overseas earnings to 21%.
The Biden administration projects the series of proposed corporate tax changes will generate $2.5 trillion over 15 years to fully pay for the infrastructure plan. But congressional Republicans and business leaders have pushed back on the proposed hike, arguing it will drive business overseas.
Biden defended his push to increase the corporate tax rate — reduced to 21% from 35% under the Trump administration in 2017 — citing a recent study that found that at least 55 of the country’s biggest corporations paid no federal taxes last year.
"It's not fair to the rest of the American taxpayers," Biden said.
The president, addressing concerns raised by Republican lawmakers that the plan is too expansive and costly, argued that in "America, we don't just fix for today, we build for tomorrow."
Senate Republican leaders have said they are willing to work on an infrastructure bill, but they have taken issue with some of the proposals in Biden’s plan that they deem go beyond traditional infrastructure projects, such as Biden’s pitch to create a network of 500,000 electric vehicle charging stations across the country.
"Two hundred years ago, trains weren't traditional infrastructure either until America made a choice to lay down tracks across the country," Biden said. "Highways weren't traditional infrastructure until we allowed ourselves to imagine that roads could connect our nation across state lines. The idea of infrastructure has always evolved to meet the aspirations of the American people and their needs, and it's evolving again today."
Top administration officials fanned out Wednesday in defense of the plan.
Treasury Secretary Janet Yellen, in a conference call with reporters, argued that the corporate tax hike was needed because the nation’s "tax revenues are already at their lowest levels in generations, and as they continue to drop lower we will have less money to invest in roads, bridges, broadband, and [research and development]."
"The revenue generated by the tax plan will be turned into funding for both traditional infrastructure and the more modern kind needed to run a digital economy, like high-speed broadband networks," Yellen said.
Commerce Secretary Gina Raimondo, speaking at the top of Wednesday’s White House news briefing, indicated there was "room to compromise" with business leaders on the rate and time frame for the plan.
"What I am imploring the business community not to do, is to say ‘We don't like 28[%]. We're walking away. We're not discussing,’ " Raimondo said. "That's unacceptable. Come to the table, and problem-solve with us to come up with a reasonable, responsible plan."
Prominent business groups such as the U.S. Chamber of Commerce and Business Roundtable have said they support investment in infrastructure but oppose the proposed tax hike, arguing it would crush the country’s ability to entice businesses to remain in the United States.
Some business leaders, including the founders of Amazon and Lyft, have come out in support of the tax increases.
Lyft president and co-founder John Zimmer told CNN on Wednesday he supported the president’s proposed tax plan.
"I think it's important to make investments again in the country and the economy, and as the economy grows, so too does jobs and so too does people's needs to get around," Zimmer said.
Jeff Bezos, CEO and founder of Amazon, in a statement posted on the company’s website on Tuesday, said the company was "supportive" of an increase.
"We recognize this investment will require concessions from all sides — both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate)," Bezos wrote. "We look forward to Congress and the administration coming together to find the right, balanced solution that maintains or enhances U.S. competitiveness."