Biden meets with bipartisan group on $2.3 trillion infrastructure plan, saying he’s open to negotiate

Joe Biden Oval Office
President Joe Biden.

  • Biden held his first official meeting with eight bipartisan lawmakers to discuss infrastructure.
  • He told reporters that he is willing to negotiate on both the size and the scope of his plan.
  • Republican lawmakers argue his plan is too focused on things aside from physical infrastructure.
  • See more stories on Insider’s business page.

For the first time since unveiling his $2.3 trillion infrastructure package two weeks ago, President Joe Biden met with a bipartisan group of lawmakers on Monday to discuss the proposal.

Eight lawmakers, including Chair of the Senate Committee on Climate, Science, and Transportation Maria Cantwell, ranking member of the House Committee on Transportation and Infrastructure Sam Graves, and Rep. Don Young of Alaska, joined Biden and Vice President Kamala Harris in the Oval Office to kick off bipartisan discussions.

“I’m prepared to negotiate as to the extent of my infrastructure package, as well as how we pay for it,” Biden told reporters after the meeting.

He also dismissed the idea that the meeting was just “window dressing,” and said he was “prepared to negotiate as to the extent of the infrastructure project as well as how we pay for it,” citing broadband and clean-water access as important parts of his definition of infrastructure.

This meeting followed a press briefing earlier in the day, when White House Press Secretary Jen Psaki said Biden is “absolutely” willing to negotiate on the size and scope of the package.

With regard to scope, Republican lawmakers have argued that it’s too focused on things besides rebuilding physical infrastructure, like roads and bridges. For example, Senate Minority Leader Mitch McConnell said in a statement two weeks ago that while Biden could have drafted a “serious, targeted infrastructure plan” that would have received bipartisan support, “the latest liberal wish-list the White House has decided to label ‘infrastructure’ is a major missed opportunity by this Administration.”

And with regards to the size of the plan, Republican lawmakers have said the $2.3 trillion price tag, along with Biden’s proposed tax hikes, are too high.

Ranking member of the Senate Committee on Commerce, Science and Transportation Roger Wicker, who attended the meeting, told ABC News in an interview on Sunday, “We are willing to negotiate with him [Biden] on an infrastructure package, and this trillion-dollar number is way too high for me.”

He added that negotiations on the plan have to look different than the $1.9 trillion stimulus plan that passed in February without any Republican votes.

Some Democrats have said they’d like to see some changes to the package. Moderate Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio talk show last week that he does not support Biden’s proposed corporate tax increase to 28%. “Well, the bill basically is not going to end up that way,” he said.

Psaki emphasized in the Monday press briefing that Biden genuinely wants to work with both parties to create a bipartisan infrastructure bill.

“You don’t use the president of the United States’ time, multiple times over … if you did not want to authentically hear from the members attending about their ideas about how to move forward this package,” she said.

Also in the meeting were Democratic Rep. Donald M. Payne, Jr. of New Jersey, Republican Sen. Deb Fischer of Nebraska, Democratic Sen. Alex Padilla of California, and Democratic Rep. David Price of North Carolina, who all sit on committees relevant to rebuilding infrastructure.

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CEO group says Biden should stick to ‘real infrastructure’ and ‘leave the rest of the stuff for something else’

Joe Biden
President Joe Biden.

  • Business Roundtable’s CEO told Bloomberg that Biden’s infrastructure plan should stick to roads and bridges.
  • The lobbying group also opposes raising the corporate tax to 28% as a way to fund the plan.
  • Biden expressed willingness to work with Republicans on negotiating the size of the tax hike.
  • See more stories on Insider’s business page.

President Joe Biden’s $2.3 trillion infrastructure plan is ambitious. It includes funding for things like climate change and research initiatives, and an influential business lobbying group wants Biden to scale things way back.

Josh Bolten, chief executive officer of Business Roundtable, which represents CEOs of the largest US companies, said in an interview with Bloomberg TV on Thursday that the organization wants Biden to limit the scope of the package to mainly address roads and bridges and “leave the rest of the stuff for something else.”

Bolten, who was former President George W. Bush’s chief of staff for almost three years, did not clarify what he was referring to as “something else.”

“It’s the real infrastructure that can attract bipartisan support,” Bolten said, adding that “more modern infrastructure” also needs investment, citing broadband as an example. In this regard, Bolten is slightly more positive on Biden’s plan than Republican leadership, which has argued that very little of Biden’s plan fits the definition of infrastructure. In fact, Bolten said the Business Roundtable favors a “substantial amount” of what Biden has proposed. For his part, Biden has argued that infrastructure has always periodically undergone reinventions, in step with technology.

Biden’s plan also includes a proposed corporate tax rate increase to 28%, and Bolten said the group, which includes the CEOS of Apple and Amazon, is “strongly against” that proposal. Former President Donald Trump’s 2017 tax cut slashed the rate from 35% to 21%.

“It’s a massive tax increase on US business, which is really damaging, not just to the shareholders of all those businesses but to the employees and customers as well,” he said. The hike, he added, “would make us once again the least competitive in the developed world.”

Earlier this week, Bolten issued a statement criticizing Treasury Secretary’s related efforts to establish a global corporate minimum tax rate, saying it “threatens to subject the U.S. to a major competitive disadvantage.”

Insider reported on Thursday that while 65% of voters support corporate tax hikes to pay for infrastructure, Republican lawmakers, and even some Democrats, are opposed to doing so.

For example, Senate Minority Leader Mitch McConnell said Biden’s plan will get no Republican support in the Senate because “the last thing the economy needs right now is a big, whopping tax increase,” and Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio show that he would not support a corporate tax increase to 28%. Manchin does want an increase, though, and seems more comfortable with 25%.

The 28% rate seemed reasonable last year to Gary Cohn, the former head of Trump’s National Economic Council. He said at the time he was “actually OK at 28%.”

In a speech on Wednesday, Biden said he would be willing to negotiate with Republicans on the size of the corporate tax increase.

“I’m wide open, but we got to pay for this,” Biden said. “I am willing to negotiate that.”

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Joe Manchin signals he could torpedo Democratic attempts to bypass Republicans multiple times in a year

Joe Manchin
In this Feb. 13, 2021, file photo Sen. Joe Manchin, D-W.Va., departs on Capitol Hill in Washington

  • Manchin suggested he may thwart Democratic attempts to bypass Republicans in Congress more than once.
  • “I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin wrote in a Post op-ed.
  • It comes as the White House weighs the path ahead for a massive infrastructure plan.
  • See more stories on Insider’s business page.

Sen. Joe Manchin of West Virginia suggested he could derail Democratic attempts to circumvent Republicans more than once this year, arguing that embarking on the path would be harmful to the nation’s future.

“We should all be alarmed at how the budget reconciliation process is being used by both parties to stifle debate around the major issues facing our country today,” the influential Democrat said in a Washington Post op-ed published on Wednesday evening.

Manchin said that drafting bills was “never supposed to be easy,” adding it was important to address the needs of both rural areas and urban communities in the months ahead.

“I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin wrote. “How is that good for the future of this nation?”

Manchin was referring to a tactic Democrats employed earlier this year to approve a $1.9 trillion coronavirus relief package without securing any Republican votes. It comes as a top Senate official delivered a ruling on Monday that may provide Democrats an opening to bypass the GOP at least twice more this year.

Read more: Here are 9 hurdles Biden’s infrastructure plan would have to overcome in Congress before it can become law

Reconciliation is governed with a strict set of rules aimed at ensuring measures are closely related to the federal budget. Using it allows Democrats to pass bills with a simple majority of 51 votes in the Senate and avoid the usual 60-vote threshold.

The White House is starting to sell its $2 trillion infrastructure plan, which includes major funding for roads and bridges, broadband, and in-home elder care among other measures.

The Biden administration outlined a corporate tax plan on Wednesday. It includes a corporate tax increase from 21% to 28%, a step amounting to a partial repeal of President Donald Trump’s tax cuts. Republicans are staunchly opposed to the business tax hikes.

That proposed tax increase recently triggered opposition from Manchin, who said last week he favored a 25% corporate rate instead. The opposition of a single Democratic senator could block the entire passage from clearing the upper chamber.

The dynamic makes Manchin a powerful figure in the Senate. Last month, he forced last-minute changes to unemployment provisions of the stimulus law, delaying votes for almost 11 hours.

Biden said on Wednesday he was open to compromise on a lower rate, though he stressed the need to pay for the plan. “I’m wide open, but we got to pay for this. I am willing to negotiate that,” he said.

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Jeff Bezos says Amazon supports a corporate tax hike, arguing that Biden’s infrastructure plan will require ‘concessions from all sides’

Jeff Bezos Amazon
Amazon CEO Jeff Bezos.

  • Jeff Bezos says he supports a corporate tax increase to pay for Biden’s infrastructure plan.
  • “We recognize this investment will require concessions from all sides,” the Amazon CEO said Tuesday.
  • Under Biden’s plan, the tax rate for corporations would increase to 28%, up from 21%.
  • See more stories on Insider’s business page.

Amazon CEO Jeff Bezos has come out in support of President Joe Biden’s $2 trillion infrastructure plan, including a possible corporate tax hike.

“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 in a statement shared on Amazon’s Twitter account, calling the plan “a bold investment in American infrastructure.”

Biden introduced last week the first of a massive, two-part infrastructure package known as the American Jobs Plan.

The roughly $2 trillion package is expected to have wide-ranging impacts on the American economy. It includes federal spending to improve the nation’s aging roads, bridges, and ports; clean-energy projects; broadband in rural areas; affordable housing initiatives; and funding for care workers.

Biden described the plan as a “once-in-a-generation investment in America.”

The package would be funded by a corporate tax increase that will offset the cost over a period of 15 years – the tax rate for corporations will increase to 28%, up from 21%. For multinational firms, the Biden administration is seeking to put in place a 21% global minimum tax rate, a proposal that was echoed by Treasury Secretary Janet Yellen on Monday.

Amazon, a $1.62 trillion company, is the first major corporation to come out in support of the corporate tax increase.

After Biden’s plan was proposed last week, the Business Roundtable, an organization that represents CEOs of major US firms, issued a statement strongly opposing the tax increase as a way to pay for the infrastructure plan, saying it would create “new barriers to job creation and economic growth.”

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Zoom paid $0 in federal taxes on $664 million in pandemic profits, mostly by paying executives stock options

GettyImages 1137877413 NEW YORK, NY - APRIL 18: Zoom founder Eric Yuan make a toast after the Nasdaq opening bell ceremony on April 18, 2019 in New York City. The video-conferencing software company announced it's IPO priced at $36 per share, at an estimated value of $9.2 billion. (Photo by Kena Betancur/Getty Images)
Zoom paid $0 in US federal income taxes last year despite making $663.9 million in US pre-tax profits.

Zoom emerged as one of the biggest beneficiaries of the pandemic as millions became dependent on video calls to stay connected.

The video-conferencing platform raked in $663.9 million in pre-tax profits in the US alone during its last fiscal year, which ended in January, compared to $16.3 million the previous year.

But the company paid $0 in federal income taxes on those profits, it disclosed Friday in a filing with the Securities and Exchange Commission, even though the corporate tax rate was 21% for 2020.

A Zoom spokesperson told Insider in a statement the company “complies with all applicable tax laws” in countries where it does business and that it “has invested heavily in research and development activities to build and enhance its communications technology – development activity that is specifically encouraged under current law.”

But research and development credits accounted for just 1% of Zoom’s tax bill reductions, while around 99% of its savings were a result of paying executives $302.4 million in stock-based compensation, compared to $32.1 million the year before.

Zoom paid just $5.7 million total in taxes last year for an effective tax rate of 0.8%. But $3.9 million of that was paid on the company’s $14.1 million in foreign profits, for an effective rate of around 28%, highlighting major discrepancies in how the US tax system treats corporations.

Zoom’s (legal) use of stock payments to executives to reduce its tax bill reignited criticism from lawmakers and advocates who argue in favor of closing loopholes that allow massive, profitable corporations to pay less in taxes than millions of Americans.

“If you paid $14.99 a month for a Zoom Pro membership, you paid more to Zoom than it paid in federal income taxes even as it made $660 million in profits last year – a 4,000 percent increase since 2019. Yes. It’s time to end a rigged tax code that benefits the wealthy & powerful,” Sen. Bernie Sanders tweeted Sunday.

“Companies that compensate their leadership with stock options can write off, for tax purposes, huge expenses that far exceed their actual cost,” Matthew Gardner, a senior fellow at the Institute for Taxation and Economic Policy, wrote in a post breaking down Zoom’s tax strategy.

“This is a strategy that has been leveraged effectively by virtually every tech giant in the last decade, from Apple to Facebook to Microsoft. Zoom’s success in using stock options to avoid taxes is neither surprising nor (currently) illegal,” Gardner said, adding that along with its use of accelerated depreciation and R&D credits, is the same “recipe that Amazon and Netflix have used with such success to reduce their federal tax bills during the Trump corporate tax era so far.”

Amazon has also drawn the ire of Sanders and others for paying $0 in federal income taxes. Many companies, including Amazon, Delta Airlines, IBM, JetBlue, and Netflix, have even managed to achieve negative effective tax rates – meaning taxpayers paid those companies more via subsidies than the companies paid the government in taxes.

President Joe Biden has proposed raising the corporate tax rate to 28% – higher than the current rate, but lower than the 35% companies were taxed at before former President Donald Trump took office. However, simply raising the tax rate doesn’t necessarily close the loopholes allowing companies like Zoom to pay $0 to the federal government.

Other proposals, like the Treasury Secretary Janet Yellen’s plan to get countries to agree on a global minimum tax rate so companies won’t just seek out low-tax countries, or Biden’s plan to eliminate Trump loopholes that let companies move profits offshore to avoid paying taxes on them, may help to raise corporation’s effective tax rates.

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Biden is reportedly getting even more serious about taxing the wealthy

joe biden
President Joe Biden participates in a conference phone call with governors affected by a snowstorm in the Midwest and southwest Tuesday, Feb. 16, 2021, in the Oval Office of the White House.

  • Bloomberg reports that Biden is getting more serious about some taxes targeting the rich.
  • The increases come amidst growing economic disparity throughout the pandemic.
  • Capital gains, larger corporations, and high-earners could feel the impact of the hikes under talks.
  • See more stories on Insider’s business page.

President Joe Biden is getting even more serious about raising taxes on the wealthy, according to a new Bloomberg report. It likely won’t look like a “wealth tax,” though.

Biden hasn’t said he’d enact a wealth tax like the one proposed by Sen. Elizabeth Warren, and instead he’s reportedly considering alterations to the tax code that would increase taxes on high earners without creating a brand-new tax that targets wealth.

Biden has already said that Americans making over $400,000 will see a “small to significant” tax increase. High-earning Americans could see their income taxes increase to 39%.

Now, the deputy director of the National Economic Council, David Kamin has told Bloomberg what other tax changes are currently under discussion. One is eliminating the stepped-up basis, something that Treasury Secretary Janet Yellen has already been eyeing.

That measure has to do with inheritance, and how inherited assets are valued for tax purposes. Current law lets assets that have gained value since they were originally acquired be valued at their market price and only taxed on increase from the value at the time of inheritance – not any of the prior gains.

Also under consideration, according to Bloomberg, is increasing the tax rate on capital gains, taxing them at the same rate as the income tax.

Capital gains – profits made from selling assets like stocks – are taxed differently from income once the owner has had the asset for over a year. The rates for those gains are generally lower than the income tax. Throughout his presidency, Donald Trump mostly weighed even more cuts to capital-gains tax rates. Biden’s proposal could bring the rates up to 39% for those making the most money, a far cry from rates that currently come to around 20%. Also, wealthier Americans are exactly the type of people likelier to own assets that can be sold for a capital gain.

Finally, Biden wants to raise taxes on business.

Yellen is working toward creating a global minimum corporate tax rate, under the idea that if the US can convince most other countries to set the corporate tax rate at a certain level, Biden can raise corporate taxes without fear of multinationals leaving the country.

Growing disparity has underscored the push for a tax increase

According to Bloomberg, the “administration’s intentions” have been reinforced by the K-shaped recovery taking place throughout the pandemic in which high-income Americans have seen their jobs and wages grow, while low-income Americans experience the opposite. Biden himself used the term during a 2020 presidential debate.

Throughout the pandemic, low-wage and minority workers have been hit the hardest; those low-wage jobs may also not return post-pandemic, requiring workers to learn new skills and move into different fields. On the whole, workers globally have lost $3.7 trillion in wages during the pandemic, while the world’s billionaires have added $3.9 trillion to their cumulative net worths. In the US alone, billionaires added $1.3 trillion to their net worths during the pandemic.

Biden’s $1.9 trillion stimulus did offer some relief – and increased consumer confidence – for low-income Americans. That package was passed through reconciliation, which seems to be the most likely route forward for any Democratic tax hikes.

Tax increases – and what the wealthy are (or aren’t) paying – have been a hot topic

A new report found that the top 1% of Americans are avoiding taxes more than anticipated; they’ve been failing to report about 21% of their income.

There’s also been a more targeted push by progressives to introduce a new tax on wealth. Warren introduced a new bill that would increase taxes on the top 0.05% of households. If the measure had been in place in 2020, it would have raised $114 billion from billionaires alone.

White House Press Secretary Jen Psaki has said Warren and Biden share similar objectives for addressing that “those at the top are not doing their part,” but the two ultimately have different plans.

In an interview with Bloomberg, Warren praised the American Rescue Plan and Biden’s continual advocacy for it. “There is momentum now for real change, and tax policy is a critical part of that change,” she told Bloomberg.

Warren also recently Sen. Bernie Sanders and other progressive Democrats in introducing a bill that would target corporations where CEOs are at least 50 times more than the median worker. That bill could raise up to $150 billion in 10 years.

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Janet Yellen wants to overhaul corporate taxes for the whole world – she’s talking to other countries about a minimum rate

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Treasury Secretary Janet Yellen.

  • The Washington Post reports Treasury Secretary Yellen is working on a global minimum tax rate.
  • The nonbinding rate would apply to multinationals, as she seeks to keep them from shopping for the lowest territory.
  • Yellen and Biden want to raise the corporate tax rate but need the rest of the world onboard.
  • See more stories on Insider’s business page.

Treasury Secretary Janet Yellen has been clear since her confirmation hearing and subsequent press appearances that the Biden administration needs to raise new tax revenues. At the same time, she’s warned of the difficulties of implementing a wealth tax, which is favored by the progressive wing of the Democratic Party.

Part of the solution is reforming the corporate tax rate – not just in the US but far beyond its borders.

To that end, Yellen is in active talks with other countries about setting a global minimum rate for corporate taxes, The Washington Post’s Jeff Stein first reported.

The US was long an outlier, with a corporate tax rate of 35% versus the international average of 24%, until former President Donald Trump’s 2017 tax cut slashed the corporate rate to 21%. But even that hasn’t stopped other countries from lowering their rates to attract multinationals. The Post noted that nine countries lowered their corporate tax rate just last year.

Nobel Prize-winning economist Joseph Stiglitz, a mentor of Yellen’s, told the Post that if she is successful in these talks, it would be “a little like the Paris climate accord of taxes.” Yellen is holding talks with more than 140 international counterparts via the Organization for Economic Cooperation and Development (OECD), where countries are looking at global tax issues, with a particular focus on tech.

The goal for now is a nonbinding consensus on a minimum tax rate within the OECD, with the thinking that the US could move off the Trump-era 21% without fear of multinationals leaving to pay taxes at a lower rate somewhere else.

In the background of Yellen’s push for a global minimum is the Biden administration’s current push to find more tax revenue. President Joe Biden is reportedly planning the first major federal tax increase in nearly three decades, according to Bloomberg. One of the proposals on the table is a raise to the corporate tax, something that Biden campaigned on. He’s proposed raising the corporate tax rate to 28%.

The right-leaning Tax Foundation found that, since 1980, the “worldwide average statutory corporate tax rate has consistently decreased,” with the biggest drops coming in the early 2000s. According to the Tax Foundation, “the worldwide average statutory corporate income tax rate” is 23.85%.

Biden also just said this week that Americans earning over $400,000 could see an increase in their taxes, a measure he acknowledged may not win any Republican support.

There could be a complicated path forward for Yellen’s corporate minimum, per the Post. Congress may need to be involved in approving new tax rules, and it could take the countries involved years to enact the tax, if they even choose to adopt it.

As the Post reports, if the complex measure is successful, it would be a huge accomplishment for both Yellen and Biden’s presidency – and maybe the world. It could also help pay for a $2 trillion infrastructure package.

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