President defends corporate tax hike as Manchin threatens to block it

President looking to corporate tax increase to pay for $2 trillion infrastructure plan

Joe Biden has defended corporate tax hikes as Senator Joe Manchin threatened to block the president’s proposal.

The White House is looking to raise the corporate tax rate to 28 per cent as a way to pay for his administration’s $2 trillion infrastructure improvement plan.

But the conservative Democrat senator, whose vote will likely be needed to pass the White House’s legislation, said on Monday that the rate would need to come down.

Mr Biden was asked about the proposal as he landed back in Washington DC on Marine One after spending the weekend at Camp David in rural Maryland.

He was asked by reporters if he was worried that the move would see companies ditch the US for cheaper locations.

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“Not at all,” said Mr Biden, before being asked why he believe that to be the case.

“Because there’s no evidence of that,” replied the president.

“The tax was 36 per cent and it is now down to 21 per cent. We are talking about a 28 per cent tax that everyone felt was fair for everybody.

“Here you have 51 or 52 corporations in the Fortune 500 that haven’t paid a single penny in taxes for three years.”

But Mr Manchin, of West Virginia, said that he supported a corporate tax rate of 25 per cent.

“As the bill exists today, it needs to be changed,” Mr Manchin said on West Virginia Metro News’s Talkline show.

“I think [the corporate rate] should have never been under 25 per cent, that’s the worldwide average. And that’s what basically every corporation would have told you was fair.”

Earlier Treasury Secretary Janet Yellen said she wanted to see a minimum tax levy on corporations around the world to prevent companies relocating to find lower rates.

“We’re working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” Yellen said in a speech to the Chicago Council on Global Affairs.

“Together, we can use global minimum tax to make sure that the global economy thrives, based on a more level playing field in the taxation of multinational corporations and spurs innovation, growth and prosperity.”

Under the infrastructure plan the US corporate tax rate would climb to 28 per cent from 21 per cent.

The move would come four years after Donald Trump cut the rate from 35 per cent, which at the time was the highest in the world.