House Majority Whip Jim Clyburn signaled that raising the corporate tax rate from 21 percent to 25 percent might be the best rate for President Biden and the Democratic-led Congress to move forward with but added that he expects Biden to sit down with the "corporate community" to come up with the "sweet spot that will benefit us all."
When Clyburn, alongside Rep. Haley Stevens of Michigan, announced the launch of the new House Democratic Manufacturing Working Group, he mentioned that South Carolina has attracted large automakers such as BMW and Volvo to their state.
The South Carolina government has many tax incentives in place to encourage businesses to move their operations to the state.
Clyburn, a South Carolina Democrat, was asked if Biden's support for raising the corporate tax rate could make the U.S. a less attractive place for business.
"I've heard from a lot of corporations that nobody lobbied for the rate to be dropped to 21 but it got dropped to 21 and the next thing I knew that the affordable housing programs that we were working on in South Carolina, all went away. And they told me because of what happened with that tax rate, it was no longer profitable for them to do affordable housing. So we've got to strike a balance here," Clyburn said on Thursday.
"I think that what President Biden did in his campaign, he ran on the fact that he would entertain the raising of those corporate rates and I expect him to do that. But I also expect him to sit down with the corporate community, and come up with the sweet spot that will benefit us all," he added.
Clyburn said that "corporations have to be good citizens" and lawmakers should look at how to "best move the country forward" to benefit everybody.
"So I don't think to have a knee jerk reaction to what the corporate rate is will do us any real good. We ought to take a hard look at it. If you remember that debate, and I never remember anybody ever even mentioning going below 25, I heard 25, and then all of a sudden the bill comes out and it's 21," he said, referring to the Republican tax reform law passed in 2017. "How did they get there? Why did they get there? I don't know. But I do know that there is a sweet spot to be had and we all sit around the table and find out what it is."