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Does It Shock You That DINOs Side With The GOP Against Increasing Taxes On Corporations

"Joe Manchin-- Fake Democrat" by Nancy Ohanian

One of the critiques of Biden's infrastructure proposal involves the plans for taxation to cover the $2 trillion + cost. Progressives, who generally find the whole proposal woefully inadequate, have been disappointed that Biden barely touches the corporate tax rate, which has decreased drastically since the 1950's when it was raised from 38% under Truman to 52% under Eisenhower to pay for the Korean War. JFK and LBJ started cutting the corporate rate and in 1987, Reagan really whacked it down to 34% in 1988 and it stayed at 35% until Trump cut it back to 21% in 2018.

Most progressives would have preferred Biden bring it back up to 35%. Instead, Biden has proposed 28%. Republicans and conservative Democrats from the Republican wing of the Democratic Party flipped out and immediately started countering with using regressive taxes (sales taxes, VAT, borrowing schemes) that all fall hardest on the working and middle class, exactly the people who Biden has pledged to not raise taxes on. Aside from the entire GOP-- who will oppose Biden's plan no matter what he proposes-- the loudest voice against the increase in corporate taxes from 21 to 28% is West Virginia reactionary Joe Manchin. This chart shows the corporate tax rate over the last half century:

Manchin says he will veto the whole package if the corporate tax rate goes up to 28% and insists that 25% is as high as he's willing to go. He is also a big proponent of making the working class pay through sales taxes. He told a local radio host that he isn't the only Democrat in a reactionary mode on taxation: "There’s six or seven other Democrats who feel very strongly about this. We have to be competitive, and we’re not going to throw caution to the wind." Presumably he's talking about austerity imbeciles Kyrsten Sinema (AZ), Tom Carper (DE), Mark Warner (VA), Angus King (I-ME), Maggie Hassan (NH), Jon Tester (MT) and Jeanne Shaheen (NH), possibly Frackenlooper (CO) and Mark Kelly (AZ) as well.

A few days ago, the NY Times pointed out that dozens of big profitable companies don't pay any federal taxes, something they bribe conservative members of Congress to "legally" achieve. This is a sickening list of tax cheats whose tax increase should be retroactive:

Biden must have seen the article: "You have 51 or 52 corporations of the Fortune 500," he said, "that haven’t paid a single penny in taxes for three years. Come on, man. Let’s get real."

Shervin Aazami, the progressive Democrat running for a congressional seat in the San Fernando Valley agrees with Biden on the getting real part. "Before the 2017 GOP tax cuts that brought the corporate tax rate to 21%, the rate was at 35%," he reiterated. "To be frank, Biden proposing to raise up back to 28% isn't a victory-- it's still a lower rate than it was before the Republicans took an axe to it. Plus, a $2.25 trillion infrastructure plan over 8-10 years is paltry compared to what we need to effectively mitigate catastrophic climate change. To put this in perspective, Congress appropriated over $5 trillion to address the COVID-19 pandemic. We keep saying climate change is the existential threat of our times - let's put our money where our mouth is. $2.25 trillion is nowhere near enough.

A new report from the Institute on Taxation and Economic Policy deals with the horrific impact that regressive sales taxes have on people at the bottom of the economic ladder, particularly racial minorities. In their introduction, they state that "Nearly all state tax codes are upside-down. They collect a larger share of income in taxes from those with the lowest incomes than from those with the highest. While revenues raised through taxes are vital to funding public investments in education, health, and the safety net that help to combat income inequality, ITEP’s Who Pays? report shows that the lopsided way in which those taxes are collected deepens the yawning income gap between high-income households and low-income households in 45 states. Over-reliance on consumption taxes like sales and excise taxes are hallmarks of the most regressive state tax codes, or tax codes that require a greater share from low-income households than from high-income households. State and local tax systems are demanding the most from those with the least resources while asking comparatively little of those who already have the most. Yet policy offers tools that could instead reduce inequality. Some states are starting to pioneer a better approach, offering powerful lessons for advocates and leaders... Those disparate impacts across race are often an intentional policy choice, such as under an 1875 property tax cap in Alabama designed to protect former enslavers after emancipation. The cap remains in place to this day. In other instances, the bias may be less obvious but equally destructive. Disaggregation of tax data by race can expose both types of discrimination."

This morning, the Wall Street Journal published a piece by Andrew Duehren on the disagreements inside the Democratic Party's congressional delegation over tax policy. Republicans are just in obstruct everything all the time mode "but," wrote Duehren, "some Democrats are raising their own questions about the plan. With very narrow majorities in the House and Senate, Democrats will need nearly unanimous support in their party to advance the package without Republican votes, and many lawmakers are floating potential changes to the plan," shockingly almost all of them on the backs of the working and middle class.

Rep. Peter DeFazio (D-OR), the chairman of the House Transportation and Infrastructure Committee, said he didn’t think paying for the full cost of the plan through tax increases was necessary. DeFazio said he would support an increase in the gas and diesel tax to pay for the new investments over time, as well as more borrowing to cover part of the cost. 'When you’re borrowing money for current consumption versus borrowing money for investment it’s a different thing,' he said. Biden’s plan doesn’t include any increases in the gasoline tax, which the White House has opposed as a regressive tax. The federal tax on gas currently stands at 18.4 cents a gallon."

The early questions from Democrats reinforce expectations that this next wave of legislation won’t move nearly as quickly as the $1.9 trillion Covid-19-aid plan, almost entirely deficit-financed, that Mr. Biden signed into law last month. Lawmakers are preparing for a monthslong process, with an eye toward passing the plan this summer.

...Rep. Josh Gottheimer (very corporate Blue Dog-NJ) said he wanted to see the Biden administration consider alternatives to the corporate tax increases to try to court Republican support. "I think on the corporate piece, if it’s a nonstarter for the Republicans and it means we can’t get bipartisanship, I’m eager to hear their other ideas,” he said, listing user fees as one possibility.

...Some Republicans have indicated they are open to raising the gas tax and to putting into place a tax based on the miles that a vehicle travels, to capture revenue from electric vehicles that don’t use gasoline. The Biden plan includes $174 billion for electric vehicles.
Rep. Sam Graves (R-MO), the top Republican on the House Transportation and Infrastructure Committee, said a vehicle-miles traveled tax was an important measure to finance infrastructure spending on a continuing basis. He said he opposed paying for the plan by borrowing.
“We have to make sure we are putting money into the trust fund,” he said. “Electric vehicles are a perfect example of a vehicle system that doesn’t pay into the use of that road.”
Rep. John Garamendi (D-CA) said lawmakers would need to craft a new way to capture revenue from electric vehicles. “We have to wrestle with that and it’s something that needs to be done with this package,” he said.
But other Democrats, in line with the White House, don’t support raising the gas tax or collecting revenue from electric vehicles, noting the taxes hurt lower income people harder and could also discourage greener transport.
“Gas taxes are regressive in terms of who pays them, and on the other hand we need to create incentives to move towards [electric vehicles], So I think a miles traveled tax does not give people incentives to get an electric car,” said Rep. Andy Levin (D-MI).

“There have been some proposals out there about user fees or gas taxes, essentially,” said White House press secretary Jen Psaki last week. “We don’t agree with that,” she said, while adding the White House was open to hearing ideas.

If Democrats forgo some of the tax increases and instead plan to borrow to pay for some of the plan, they will likely face another debate about the wisdom of taking on more debt. After more than $5 trillion in spending on coronavirus relief, debt levels as a percentage of gross domestic product in the U.S. have reached levels not seen since World War II.
“We’re willing to trust Janet Yellen and Jay Powell that we’re not at the brink of a hyperinflation risk, but maybe let’s not go that much farther,” said Rep. Don Beyer (New Dem-VA), a member of the House Ways and Means Committee and the chairman of the Joint Economic Committee. “Most of us believe at a certain point you do have to pay for what you’re getting.”

Jonathan Chait noted in his column today that the Republican position is to oppose any infrastructure bill that's paid for that raises taxes on corporations or on the wealthy... and to oppose any infrastructure bill that isn't paid for. Sounds like New Jersey Blue Dog Josh Gottheimer's position as well. It points to why America is falling apart: conservatives in general and Republicans, not just the party of hatred and bigotry, but also the party of greed and selfishness.

Jason Call, a congressional candidate in northwest Washington, running for a seat held by a run-of-the-mill corporate Democrat pointed out that "What Democrats are failing to act on is the fact that income inequality is bad, and a large part of that income inequality is the modern corporate tax rate. Business is not just 'the business'-- it's people. It's CEOs, managers and executive boards, and shareholders, all of whom are able to pay themselves grossly exorbitant salaries and bonuses because the business is able to save that money by dodging tax liability. They rarely use their tax breaks to invest in general employee raises. We now see CEO salaries running upwards of 400 times their lowest paid workers. At a very minimum the Biden administration should immediately demand a return to pre-Trump corporate taxation. Anything less means that the claim of 'raising corporate taxes' is deception, sleight of hand, and to be quite honest when Biden said nothing would fundamentally change this is what he was signaling-- that he had no intention of impacting the very wealthy business and ownership class. We cannot stand for this as a party. We must tackle income inequality at its core, and that means taxing the rich through any means necessary, including corporate taxes."

Please consider contributing to Jason' and Shervin's campaigns by clicking on the 2022 congressional thermometer above.

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