Joe Biden Seeks ‘Fair’ Corporate Tax To Fund $4T Spending Plan – InsuranceNewsNet | #insurance | #seniors | #elderly
President Biden on Wednesday is expected to call for tax increases on corporations and wealthy Americans to help cover the cost of his up-to-$4 trillion plan to revamp the nation’s infrastructure and social programs.
The White House says the president sees the next phase of his “Build Back Better” agenda as a chance to “rebalance” what the administration describes as an out-of-date federal tax code and to funnel that money into its new spending priorities.
Mr. Biden is set to outline his infrastructure vision in a major speech Wednesday in Pittsburgh. He will follow up next month with announcements of new child care, health care and education programs.
The Pittsburgh speech marks Mr. Biden’s return to the blue-collar, labor-friendly town where he launched his presidential campaign two years ago.
“The speech tomorrow is about making an investment in America — not just modernizing our roads, our railways, our bridges, but building an infrastructure of the future,” White House press secretary Jen Psaki said at the daily press briefing.
Mr. Biden’s tax agenda is expected to be as ambitious as his spending plans.
The White House is considering a range of tax increases to help pay for the far-reaching initiatives, which include “green jobs” programs and other efforts to combat climate change while rebuilding the nation’s transportation and manufacturing infrastructure.
A top proposal is increasing the corporate tax rate to 28% from 21%, which would raise $730 billion in revenue over 10 years, according to an analysis by the Tax Policy Center, a joint project of the liberal-leaning Urban Institute and the Brookings Institution. President Trump used the 2017 tax overhaul to slash the corporate rate to 21% from 35%, the highest among developed countries.
Mr. Biden also is considering raising the top marginal income tax rate to 39.6% from 37% for $310 billion more in revenue.
Other proposals include applying the Social Security payroll tax on annual earnings above $400,000, increasing the minimum taxes on foreign-source income of U.S. multinational corporations, and increasing taxes on capital gains and dividends for taxpayers with annual incomes above $1 million.
If all the items under consideration are enacted, then the government would reap just over $3 trillion more in tax revenue over a decade, according to the Tax Policy Center’s projections, though accomplishing it would be a political feat.
Republicans will oppose Mr. Biden’s plans for taxing and spending. They offered support for legislation narrowly tailored toward infrastructure and made it clear that they would not support a Biden “tax hike bonanza” or Democrats’ push to have more money set aside for climate change mitigation.
“President Biden and Senate Democrats stand ready to inflict a mortal wound on our still-recovering economy,” said T.W. Arrighi, spokesman for the National Republican Senatorial Committee, the campaign arm for Senate Republicans. “The proposed $3.5 trillion in new taxes to pay for a grab bag of liberal priorities will not just be focused on the most wealthy but will hurt working Americans who are still trying to make ends meet during this pandemic.”
On the spending side, Mr. Biden is focused on “shovel ready” construction projects, expanding broadband access and addressing “needs in people’s homes and communities,” Ms. Psaki said.
The Biden administration wants $2.25 trillion in spending on a jobs and infrastructure package, according to details of the plan first reported by The Washington Post.
Roughly $650 billion would be set aside for roads and bridges, and billions more would be directed toward elderly care, housing and bolstering U.S. manufacturing. It also includes money for the nation’s electrical grid and improving drinking water.
Mr. Biden hopes the public and enough lawmakers on Capitol Hill are open to tax hikes on businesses and wealthy Americans to help pay for his “bold” vision.
“He believes there is more that can be done to make the corporate tax code fair, to reward work, not wealth, to ensure that we can invest in future industries that are going to help all people in this country,” Ms. Psaki said.
The infrastructure plan again will test Mr. Biden’s pledge to bring bipartisanship back to Washington. He fell short on that front with his $1.9 trillion American Rescue Plan, which passed Congress through a fast-track process, known as budget reconciliation, without Republican support.
Senate Minority Leader Mitch McConnell signaled that winning over Republicans won’t be any easier this time.
“We’re hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing, left-wing policies,” the Kentucky Republican said last week on the Senate floor.
Transportation Secretary Pete Buttigieg countered that Republican voters are more willing than Republican lawmakers to supporting infrastructure spending.
“Let’s remember, the American Rescue Plan had lots of Republican support, an enormous amount of Republican support, just not here in Washington,” Mr. Buttigieg said recently on CNN. “Ultimately, it’s up to them whether they’re going to support something, but we’re going to work with them to try to shape it in a way that earns as much support as possible.
“And, at the same time, the American people can’t wait,” he said. “We have got a trillion-dollar backlog just in things like our roads and bridges. We have got to act.”
A big challenge facing Mr. Biden is getting the more moderate members of the Democratic Party to sign off on his tax-and-spending plans, which could put a big target on their backs as they lay the groundwork for reelection in competitive states and congressional districts.
Sen. Joe Manchin III of West Virginia, the most conservative Democrat in the upper chamber, said Republicans must be included in the infrastructure talks.
Fiscal hawks are demanding that the administration make sure any infrastructure package doesn’t send the nation deeper into the red.
“As the details come out, you’ll hear advocates claim these new investments will actually pay for themselves through new growth or that deficits don’t matter,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget. “That wasn’t true during the 2017 tax cut debate, and it certainly isn’t true now.”
The White House refused to rule out deficit spending and is downplaying the idea that Mr. Biden’s tax vision could harm the economy.
A study by the Tax Foundation, a pro-business Washington think tank, found that raising the corporate tax rate would reduce gross domestic product, eliminate 159,000 jobs and lower wages for workers.
“We also modeled the effects of infrastructure spending financed by a corporate tax increase and found it would, on net, be a negative for the economy,” said William McBride, vice president of federal tax and economic policy at the Tax Foundation.
The highly anticipated White House push for infrastructure spending also galvanized organizations that want a piece of the action.
Climate Power, the League of Conservation Voters and the Potential Energy Coalition announced Tuesday that they will promote Mr. Biden’s plans with a $2 million national advertising buy.
“Calling all builders,” the ad says. “Your country is calling you. Tackling climate change is the job of our lifetime. It is time to ‘Build Back Better.’ Let’s get to work.”
⦁ This article is based in part on wire service reports.
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