The Day at a Glance | October 26 2021

The Top

*Democrats discard increasing corporate taxes in order to finance Biden`s economic plan.

*Global trade volume grew 0.8% in August after a (-) 1.4% contraction in July: CPB.

*Inflation for producers in Spain continued to accelerate at an annual record rate of 23.6% in September.

*China and the United States confirmed an improvement in bilateral relations after conversations between Liu He and Janet Yellen.

*Economic indicators: Consumer confidence figures are expected to be made public in the U.S. (108.3e. vs 109.3 prev.).

Economic environment

Democrats withdraw the corporate tax in Biden`s economic plan. According to the most recent reports on discussions that have been had within the Democrat Party regarding the approval of President Biden`s economic plan, the Party will leave the corporate tax out of the package. Resistance of an increase in taxes didn`t only come from Republicans, but from some Democratic congressmen as well, which has forced the Party to eliminate the proposal from the package; one of Biden`s main promises during his campaign. Arizona Senator Kyrsten Sinema has been the main opponent of the proposal; while groups like the U.S. Chamber of Commerce and the Business Roundtable have firmly opposed the increased tax proposed by Democrats in order to fund the spending package. Biden has acknowledged that he doesn’t count on enough support to increase the corporate tax – the one that Donald Trump reduced to 21% in 2017. Democrats are expected to present a package for it to be voted on next week, but at the moment, they are negotiating the details revolving around funding the package worth 2 trillion dollars. There are conversations about taxing the country`s wealthiest individuals or different ways to obtain resources from the private sector without anything directly affecting the tax rate. Democrats are exploring the possibility of implementing a minimum corporate tax rate on financial returns and retain non realized capital gains from billionaires. Some legislators have assured that if the corporate tax rate could not be modified in the short term, they expect to continue carrying out efforts in the future to reverse Trump`s tax cuts.