Senate Democrats settling on 25% corporate tax rate

  • Written by Axios
  • Published in Politics
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The universe of Democratic senators concerned about raising the corporate tax rate to 28% is broader than Sen. Joe Manchin, and the rate will likely land at 25%, parties close to the discussion tell Axios.

Why it matters: While increasing the rate from 21% to 25% would raise about $600 billion over 15 years, it would leave President Biden well short of paying for his proposed $2.25 trillion, eight-year infrastructure package.

  • Biden’s plan to increase the rate U.S. multinationals pay on their foreign earnings from 10.5% to 21% is less controversial and stands a better chance of remaining intact in the final legislation. That would raise an additional $700 billion.
  • But corporate lobbying groups are preparing for a long-term battle over both rates.
  • The Business Roundtable launched an advertising campaign last week and released a survey of 178 CEOs discussing how the proposed changes would affect their company’s competitiveness.

The big picture: The White House hasn’t publicly backed away from the president's proposed 28% rate but indicated it’s willing to find a compromise to pay for his spending plans.

  • Democrats close to the White House expect Biden will accept 25% and pocket it as a political win.
  • President Trump lowered the rate from 35% to 21%.

Driving the news: A collection of 10 senators from both parties — the so-called Group of 20 — is working to find a compromise on what to include in an initial infrastructure package and how to pay for it....

  • “If we come together in a bipartisan way to pass that $800 billion hard infrastructure bill that you were talking

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