GOP senators open to corporate tax increase
Some key Republican senators won't rule out raising additional revenue from corporations, and told Axios they may be willing to close loopholes that allow big businesses to eliminate their overall tax bill.
Why it matters: While President Biden’s proposal to raise the corporate tax rate from 21% to 28% to pay for his infrastructure plan has been met with near-uniform GOP opposition, there’s some appetite to ensure corporations pay more.
- “I'm willing to do some things on the revenue front if they can do some things on the-way-the-government-works front,” said Sen. Lindsey Graham (R-S.C.).
- “The way you do that is you sort of put some limit on write-offs,” Graham added.
- “I believe everybody should pay their fair share,” said Sen. Mike Braun (R-Ind.). “I come from the world of small business. So, I scratch my head when big corporations don't pay their fair share of taxes.”
Sen. Ted Cruz (R-Texas) used the occasion to lobby for a flat tax.
- “I think the tax code is filled with loopholes and subsidies that aren't fair," he said. "The answer isn't to eliminate every exemption and keep rates high — that's a massive tax increase. The answer is to eliminate the exemptions and lower rates."
- Some of the comments came the same day Senate Republicans introduced their own infrastructure plan that included “protecting against any corporate or international tax increases.”
Driving the news: The president has highlighted a study from the left-leaning Institute on Taxation and Economic Policy showing 55 corporations actually received $3.5 billion in tax rebates, instead of paying approximately $8.5 billion in taxes on some $40.5 billion in income.
- "It's just not fair. It's not fair to the rest of the American taxpayers," Biden said when he unveiled his corporate tax proposal on April 7.
Go deeper: The president has proposed raising an additional $2 trillion from corporations by focusing on three areas.
- He wants to raise their basic tax rate from 21% to 28%.
- For U.S. multinationals, he plans to increase taxes on their foreign earnings from 10.5% to 21%.
- He has also proposed a 15% minimum tax he wants to apply to all corporations — a catchall to prevent companies from lowering their tax payments to zero.
Be smart: While the president favors a 28% rate, Senate Democrats already appear to be settling on a 25% rate, as Axios reported this week.