Joe Biden has proposed corporate tax hike to 28%

To pay for his proposal for infrastructure spending, President Joe Biden wants to raise the federal tax rate on corporations from 21% to 28%, which is in line with a promise he made on the campaign trail.

Prior to 2017, when President Donald Trump signed a tax overhaul measure, the corporate tax rate was 35%. Trump's law lowered the rate to 21%, so Biden's proposal would move it half way back to where it was.

Republicans have argued that raising the tax to 28% would hurt companies' competitiveness and put a damper on job creation. Some congressional Republicans have floated an alternative — paying for a smaller infrastructure package through user fees, such as a hike in the gasoline tax.

Further complicating passage of Biden's proposed 28% rate is that Democratic Sen. Joe Manchin of West Virginia has already said he opposes any new rate higher than 25%. In the current 50-50 Senate, Manchin's vote would almost certainly be necessary for passage.

Biden has expressed openness to signing a bill with a rate lower than 28% if a mutually agreeable measure can be negotiated.

For these reasons, enactment of a 28% corporate tax rate faces significant legislative obstacles. However, the increase has become a key element of Biden's infrastructure proposal, which in turn is a major legislative priority for the White House. 

We rate this promise In the Works.