April 19, 2021 What to expect in Washington (April 19) For the second Monday in a row, President Biden today meets with a group of Republicans and Democrats to look for a path forward on the Jobs Plan infrastructure proposal paired with corporate tax increases, including a 28% rate, a minimum tax based on book income, and international tax changes. “On Monday, the President will meet with a bipartisan group of members of Congress to discuss the historic investments in the American Jobs Plan, including in highways, drinking water systems, broadband, and the care economy,” White House Press Secretary Jen Psaki said Friday. Politico reported that the group includes Senators John Hickenlooper (D-CO), John Hoeven (R-ND), Angus King (I-ME), Mitt Romney (R-UT), and Jeanne Shaheen (D-NH); and Reps. Emanuel Cleaver (D-MO), Charlie Crist (D-FL), Carlos Giménez (R-FL), Kay Granger (R-TX) and Norma Torres (D-CA). “The common thread with this group? All the senators in question, along with Rep. Charlie Crist (D-Fla.), are former governors and the rest are former mayors who the White House says ‘understand firsthand the impact of a federal investment in rebuilding our nation's infrastructure on their communities,’” the report said. Senators of both parties are testing the waters to determine whether a smaller, narrower infrastructure bill can move forward with bipartisan support, and likely be followed by a Democrat-only budget reconciliation bill on more divisive agenda items. On Fox News Sunday, Senator Chris Coons (D-DE), a Biden ally who has been pushing the two-bill approach to begin with what can be agreed to with Republicans then move on to what can’t, was asked why Republicans would agree to that, and said, “I think that if we come together in a bipartisan way to pass that $800 billion hard infrastructure bill that you were talking about, that I’ve been urging, then we show our people that we can solve their problems.” On the same program, Senator John Cornyn (R-TX) said, “There is a core infrastructure bill that we could pass with appropriate pay-fors, like roads and bridges and even reaching out to broadband – this pandemic has exposed a great digital divide in this country. We’ve seen advances in telemedicine. We've seen more people learning online. I think we could all agree to that. But I think that’s the part we would agree on. So, let’s do it and leave the rest for another day and another fight.” The Washington Post reported that the White House is being urged to drop the $400 billion in home- and elder-care provisions in the proposal along with the amount of tax hikes to achieve the additional revenue. Regarding the Jobs Plan as a whole, “Lawmakers and aides have already begun trying to turn the proposal, which is dauntingly vague in crucial areas, into legislative text. Still, the drafting is very preliminary, with many House committees planning hearings first. Some are waiting for the second portion of Biden’s infrastructure package, which will focus on social programs, such as the child tax credit,” the report said. Also, “House leaders are waiting for more definitive cues from the Senate parliamentarian, who largely decides what policies can be enacted under a fast-track process called reconciliation,” and there has been repeated acknowledgement from House T&I Chairman Peter DeFazio (D-OR) that specific transportation projects can’t be included under the process after some in the COVID bill were ruled out of bounds. Tax – An editorial in the Sunday New York Times called on Congress to “Make Tax-Dodging Companies Pay for Biden’s Infrastructure Plan,” arguing that the core of the Biden plan is not the 28% rate but international measures under which “companies would be subject to a 21 percent tax on income reportedly earned in other countries, alongside the 28 percent tax on domestic profits,” and that “simple fix would sharply reduce the incentive to shift profits to low-tax countries.” The NYT said, “Setting the tax rate on foreign profits at the same level as the rate on domestic profits would further reduce incentives for profit shifting,” but with OECD developed nations’ average corporate tax rate of 23.5%, “a higher tax rate on foreign profits could place some of the legitimate foreign activities of American firms at a competitive disadvantage.” Two hearings in tax-writing committees this week:
Health – The Senate HELP Committee is holding two health hearings:
On Thursday, April 22 (4 p.m.), join EY tax and tax policy leaders for “Potential US international tax reform: A discussion of Biden’s Made in America Tax Plan, OECD BEPS 2.0 developments and other recent proposals.” Register. ———————————————
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