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White House defends hiking taxes on corporations to pay for infrastructure

April 7, 2021. Summarized by summa-bot.

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JERSEY CITY, NJ - APRIL 7: Buildings in the Newport neighborhood of Jersey City and in lower Manhattan in New York City reflect the rising sun on April 7, 2021 as seen from Jersey City, New Jersey. (Photo by Gary Hershorn/Getty Images)

Faced with major blowback over its $2 trillion infrastructure proposal, the Biden administration is rolling out a campaign to justify why it needs to hike corporate taxes to fund the massive plan.

(CNN)Faced with major blowback over its $2 trillion infrastructure proposal, the Biden administration is rolling out a campaign to justify why it needs to hike corporate taxes to fund the massive plan.

The Republicans' 2017 tax cuts, which slashed the corporate tax rate to 21% from 35%, meant that the share of tax revenues collected as a share of the economy fell to 1%, the White House said.

Plus, the report points out that US has typically raised less revenue through corporate taxes relative to other advanced nations.

The report points to the fact that the share of federal revenue raised by the corporate tax has fallen steadily since 1950 and now sits at below 10%.

Corporate tax hike: Biden would raise the corporate income tax rate to 28%, up from 21%.

Global minimum tax: The proposal would increase the minimum tax on US corporations to 21% and calculate it on a country-by-country basis to deter companies from sheltering profits in international tax havens.

The administration said that in recent years, about 45 corporations would have paid a minimum book tax liability under the proposal, with the average company seeing an increased minimum liability of about $300 million each year.

"The administration's proposed global minimum corporate tax rate, however, threatens to subject the US to a major competitive disadvantage," he said.

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