Senate Democrats may be settling on a 25 percent corporate tax rate. The news service Axios reports that a growing number of Senate Democrats are looking at raising the corporate tax rate from 21 percent to 25 percent. The rate was first floated by swing Democrat Joe Manchin and would be lower than the 28 percent proposed by President Biden. However, Biden has expressed a willingness to compromise on some details of his American Jobs Plan infrastructure proposal.
Will corporate America accept a tax increase? The Washington Post reports on an effort by the White House to make the most of tension between corporate America and the Republican Party. Biden is betting that big business won’t throw its weight behind GOP efforts to block his proposed increase in corporate taxes. White House officials have been making a direct pitch to business groups for Biden’s infrastructure plan funded by a higher corporate taxes.
Why do so many corporate tax audits result in no additional tax? TPC’s Janet Holtzblatt writes that there are too many “no change” audits of big corporations—38 percent compared to 11 percent for individual income taxpayers. In a no-change audit, a taxpayer substantiates the income, deductions, and credits claimed on their tax returns. The result: The IRS spends money to conduct the audit but receives no additional payments, which means a zero return on investment for the government. The IRS needs to do a better job competing with the high-priced accounting and law firms hired by corporations to fight audits.
Kansas Gov. Kelly vetoes state income tax cuts. Democratic Governor Laura Kelly vetoed income tax cuts passed by Republican lawmakers. Their proposal would have reduced taxes by $284 million over three years. Kelly wants to avoid subsequent budget cuts to schools and infrastructure if tax revenue falls. Republicans have promised to try to override her veto.
Foxconn gets a new, smaller tax deal for a smaller project in Wisconsin. The Wisconsin Economic Development Corporation is set to approve the new deal today. It reportedly will offer the company over $10 million in state and local tax breaks. Foxconn and former Republican Governor Scott Walker’s administration had agreed to a $4 billion state and local tax incentive package, expecting the Taiwan-based tech company would hire 13,000 people. But the firm never followed through. The company and the state have subsequently lowered expectations.
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