The NRCC is running around like a chicken without a head calling Biden's modest proposal for a way-too-small corporate tax hike to pay for his infrastructure plan "a middle class tax hike." Their back up for that nonsensical claim is a week old editorial from the nonsensical Wall Street Journal editorial board, Here Come The Biden Taxes. The deranged extremists on the board demanded that "drop the pretense that any of this is moderate or unifying or bipartisan." That's especially funny since 73% of Americans support Biden's infrastructure and jobs proposal, including 57% of Republican voters, That's not bipartisan? What ever was?
In a poll released today by Morning Consult, 63% of registered voters say the rich don't pay enough in taxes (including 49% of Republicans). 64% said corporations also pay too little (including 50% of Republicans). 75% of registered voters said the tax system favors the wealthy, 76% say there are too many loopholes, 75% say the wealthiest Americans should pay higher taxes, and 73% say corporations should pay higher taxes (19%, including the Wall Street Journal editorial board and the people who work at the NRCC, disagree).
Biden should have proposed increasing the corporate tax rate to at least the 35% its been at for decades before Trump slashed it-- in a non-bipartisan way that was wholeheartedly approved by the Wall Street Journal editorial board-- to 21%. Instead, Biden suggests 28%, wayyyyyyy too low. Now Joe Manchin-- with backing of other conservative Democrats from the Republican wing of the Democratic Party-- says he will veto the bill unless the corporate rate is brought down to 25%. Manchin and other congressional conservatives propose making up for the shortfall with borrowing-- the interest payments on which enriches rich people-- and by regressive sales taxes that impoverishes the working class.
This morning, CNN reported that the White House has begun a campaign to persuade... who? The public is already persuaded. The Republicans will never be persuaded of anything short of surrender. Manchin? Then you have Sinema, sho is psychotic and can't be reasoned with. "Noting that corporate tax collections have fallen to their lowest level since World War II," wrote Tami Luhby and Katie Lobosco, "Treasury Secretary Janet Yellen said Wednesday that Republicans' 2017 Tax Cut and Jobs Act did not lure new production or investment to the US. Instead, it gave companies incentives to send workers and profits abroad. Also, other countries lowered their corporate rates in response to undercut the US, she said in a conference call with reporters. 'The TCJA not only perpetuated this race to the bottom, it also put America at a disadvantage in the running,' Yellen said of the Republicans' tax cuts. She argued the administration's proposal-- dubbed the 'Made in America' tax plan-- would make the nation more competitive and eliminate offshoring incentives. That way, more revenue remains in the US and can be used to fund the $2 trillion that Biden wants to invest in roads, bridges, broadband, clean energy, elder care and other measures. Overall, as a result of the tax cuts of prior years, the US now raises only about 16% percent of GDP in federal tax revenue, a decline of about four percentage points in the last two decades."
The White House also laid out its argument in a 19-page report released Wednesday. It focused on four major messages: that its tax package would raise needed revenue, stem companies from shifting profits and operations overseas, make the system fairer for workers and move toward a cleaner energy sector.
The Republicans' 2017 tax cuts, which slashed the corporate tax rate to 21% from 35%, meant that the share of tax revenues collected as a share of the economy fell to 1%, the White House said. Historically, corporate taxes have raised about 2% of GDP.
Plus, the report points out that US has typically raised less revenue through corporate taxes relative to other advanced nations. For the past two decades, the typical country in the Organisation for Economic Co-operation and Development has raised about 3% of GDP from corporate taxation.
Like its predecessors, the Biden administration is also trying to stem the tide of US companies moving profits to tax havens overseas through a variety of measures, including a global minimum tax. It is seeking to end provisions of the 2017 tax act, that it described as "poorly designed."
The administration also argues that it can create a more fair tax system by raising taxes on corporations, and address rising income inequality.
The report points to the fact that the share of federal revenue raised by the corporate tax has fallen steadily since 1950 and now sits at below 10%. Meanwhile, the share of federal revenue raised by individuals now exceeds 80%.
The President's plan would also eliminate some subsidies for fossil fuel producers and expand tax incentives for clean energy production.
By eliminating the subsidies, tax revenue would increase by $35 billion over 10 years, according to estimates from the Treasury Department's Office of Tax Analysis. The administration argues that the incentives would address climate change by reducing air pollution.