President Joe Biden pushed back Friday on growing criticism from Republican lawmakers that his proposal to raise corporate taxes to pay for infrastructure will hurt the economy. His remarks come as a new study suggests some of the largest companies in the United States paid no federal taxes on profits last year, and in some cases, may have even received tax rebates.
“Asking corporate America just to pay their fair share will not slow the economy at all,” Mr. Biden said following remarks on the latest jobs report Friday at the White House. “It will make the economy function better. It will create more energy.”
As part of the American Jobs Plan unveiled this week, Mr. Biden proposed raising the corporate tax rate from 21% to 28%. The plan also includes provisions to strengthen the minimum tax for U.S. multinational corporations, calls for the implementation of a minimum 15% tax on the income corporations report to investors and eliminates tax credits and subsidies for the fossil fuel industry. It has not gone over well with Republican lawmakers who argue it would slow the economy and hurt job growth amid the recovery from the pandemic.
But a newly released report by the Institute on Taxation and Economic Policy showed at least 55 of the largest corporations in the United States paid no federal corporate taxes in their most recent filing year despite earning massive profits last year – nearly $40.5 billion amid the pandemic.
The study examined big names like FedEx, Nike, Dish, Duke Energy and Salesforce. It found the 55 companies would have paid a collective $8.5 billion total for the year if they had paid the current corporate tax rate. Instead, they received $3.5 billion in tax rebates.
The report concluded that the president and Congress could take major steps toward a “fairer or more sustainable tax system” by cutting some of the tax breaks shown in their report or re-introducing a ‘minimum tax’ requiring companies to pay at least some tax in profitable years.
White House press secretary Jen Psaki cited the report Friday afternoon during her daily press briefing, stating the administration believes such corporations can pay more to help fund the “once in a generation” investment.
However, while the new study covers what companies have expensed in taxes, it is not clear just exactly how much each corporation actually paid. The Securities and Exchange Commission requires publicly traded companies to disclose their before-tax income, income tax paid on profits and factors with a significant impact on their tax expenses.
Biden faces an upward battle with getting his infrastructure and tax plan through Congress with Democrats holding such a slim majority. On Friday, he slammed the GOP congressional response.
“If the Republicans decide that we need it but we’re just not going to pay for it, it’s just going to increase the deficit,” Biden said referencing the criticism many Republicans used in their opposition to the $1.9 trillion American Rescue Plan passed last month. He also noted Republicans have been talking about the need for infrastructure for years.
“I think the Republican voters are going to have a lot to say about whether we get a lot of this stuff done,” Biden said.
