Democrats see political winner in tax battle

As President BidenJoe BidenBiden Taps California Workplace Safety Leader to Lead OSHA Romney Blasts End of Filibuster, SCOTUS US Expansion Considers Cash Payments to Help Curb Migration MORE races ahead with a gigantic plan to strengthen the country’s infrastructure, Democrats are betting that they will get a political boost from an accompanying proposal: the tax increases designed to cover the massive costs.

Biden on Wednesday outlined a series of tax reforms that aim to raise $ 2.5 trillion – much of it from large corporations – to support the new infrastructure spending. The proposal was quickly roasted by Republicans, who have long portrayed Democrats as the party of higher taxes and now warn that Biden’s plan would harm small businesses and destroy American jobs.

Still, national polls have consistently revealed that corporate and other wealthy taxpayers’ tax increases enjoy strong support from a wide variety of voters, including independent voters. And some Democrats practically drool at the prospect of taking that debate to the national stage to highlight the GOP’s backlash against a popular concept.

“If they fight the infrastructure bill by asking companies to pay more tax, that’s a total loser,” said Rep. John YarmuthJohn Allen YarmuthMcConnell Knocks Kentucky Democrat Over Support For Nixing Filibuster Democrats Pledge To Go ‘Fat’ – With Or Without GOP Democratic Majority Shrinks But Finds Unity MORE (D-Ky.), Chairman of the Committee on Budgets, said in a telephone interview this week.

“It’s just kind of a nonsense argument, and I think this is an indication of how vulnerable the Republicans are on this issue,” he added. “The issue is perfect for those, like us, who promote significant infrastructure investment and say to big companies, ‘Since your businesses depend on infrastructure, you can do more for it.’

The idea is hardly new. Democrats have spent decades trying to close the tax avoidance loopholes of corporations and other wealthy taxpayers, largely to no avail. And the Republicans were able to extend those benefits in 2017 as part of the previous one President TrumpDonald Trump: Romney Scraps End of Filibuster, Expansion of SCOTUS McConnell, GOP Condemns Biden’s Executive Command Over SCOTUS US Raises Concerns About Iran’s Seriousness in Nuclear Talks MORE‘s tax reform, including a reduction in the corporate rate from 35 to 21 percent.

But after a year of unrest triggered by the coronavirus crisis – when stocks soared but millions of low-income workers lost their jobs – Democrats believe the uneven economic impact of the pandemic has shifted public opinion enough in their favor to challenge the controversial tax increases a political asset.

Indeed, a new Morning Consult / Politico poll found that 54 percent of voters support sweeping infrastructure improvements funded by tax increases, including 73 percent of Democrats and 52 percent of Independents.

“When the largest companies avoid taxes or pay a net rate of about 7 or 8 percent on average, smaller companies and individuals have to make up for the difference,” said Rep. And KildeeDaniel (Dan) Timothy Kildee Lawmakers say manufacturers are in a better position to tackle future pandemics The Hill’s Morning Report – Presented by Facebook – Biden to hit road, tout COVID-19 relief law Democratic majority shrinks but finds unity MORE (D-Mich.), A senior member of the tax advisory committee on manners and means, told The Hill. “So I think, as much as it is about compensation, it is also about tax justice.”

As ammunition, Democrats refer to a recent report from the Institute on Taxation and Economic Policy, a progressive think tank, which found that 55 of the country’s largest companies – including Nike, FedEx and Salesforce – did not pay federal taxes in 2020, despite huge pre tax profit. In some cases, the companies received a significant federal rebate.

The report was reminiscent of last year’s revelation that Trump, a self-proclaimed billionaire, had paid just $ 750 in federal income tax in both 2016 and 2017. Both reports have enraged Democrats who promise to create a fairer system – and anything but daring Republicans to defend tax loopholes favoring the wealthy.

“Motorways are not free. And corporate freeloaders – like the 55 large profitable corporations that didn’t pay federal income tax in 2020 – would have to pay for the infrastructure and other services they depend on, ”Rep. Lloyd DoggettLloyd Alton Doggett Increases Pressure on Biden to Support Patent Waiver for COVID Vaccines House Passes Bills Providing Citizenship Path for Dreamers (D-Texas), another senior member of the Ways and Means panel, said in an email.

On Wednesday, Biden’s tax plan unveiled a series of reforms designed to force large corporations and corporations to contribute a greater proportion of revenue to the federal government. It does this largely by raising the corporate tax rate from 21 to 28 percent; prohibiting companies from shifting profits to cheap ports abroad; and creating a new 15 percent minimum tax on large corporations reporting profits to investors but no obligations to the IRS.

Minister of Finance Janet YellenJanet Louise Yellen Five takeaways from Biden’s first budget proposal Biden defense budget criticized by Republicans, progressives like Biden suggests .2B increase in IRS budget MORE House Democrats briefed on the proposal on Tuesday. And Speaker Nancy PelosiNancy Pelosi The Growing Threat of the Chinese Lawsuit Pelosi Was Planning to Retire Until Trump Won Elections: Biden Report: ‘Prince Philip Loved Devoting Himself to the People of the UK’ MORE (D-Calif.) Said on Thursday that Democrats hope to move the entire package – both infrastructure and tax provisions – through Congress and to Biden’s office by August.

The president is open to policy proposals from lawmakers in both parties, Pelosi said. “But it shouldn’t be too small,” she added, “because what we’re talking about now has to be transformative and it has to be big.”

Democratic leaders seek a delicate balance. While liberals in the party are in favor of massive spending on new infrastructure – even pressuring Biden to go beyond his $ 2 trillion proposal – the party’s moderates are wary of both the size of the package and the effects on deficit spending.

“Does it really have to be a $ 2 trillion package right now? I don’t think we have to admit that, ”an assistant told a centrist Democrat in Parliament. “We should at least try to pay as much as possible for this.”

They cannot afford to drop out.

Pelosi has only a razor-thin majority in the House, made even thinner by the recent death of Rep. Alcee HastingsAlcee (Judge) Lamar Hastings The Hill’s Morning Report – Biden Raises Vaccine Suitability Amid ‘Life or Death’ Race Biden Mourns Representative Alcee Hastings’s Death nation ‘MORE (D-Fla.). And the split is an even 50-50 in the Senate, where Sen. Joe ManchinJoe Manchin Romney Blows Filibuster End, SCOTUS Expansion Five Takeaways From Biden’s First Budget Proposal Parkland Parent Press Manchin On Gun Reform: ‘You Represent the Nation’ MORE, a moderate Democrat from West Virginia, is already wielding his inordinate influence against Biden’s plan to raise the corporate rate to 28 percent.

Those internal frictions have not been overlooked by Republicans, who are fighting to make the tax package as uncomfortable as possible for centrist Democrats in tough battlefield districts.

With that in mind, the Republicans this week are bringing to your attention another report sponsored by the National Association of Manufacturers that predicts an increase in the corporate rate to 28 percent – combined with the elimination of several other business benefits – will affect the country. million. jobs in just two years. And the Republicans’ campaign arm has been attacked, launching a wide-ranging email campaign linking vulnerable Democrats across the country to the threat of increased unemployment fueled by Biden’s proposal.

“No president has ever raised corporate taxes to rebuild an economy,” Rep. Kevin BradyKevin Patrick Brady The Hill’s Morning Report – Biden May Find Zero GOP Support For Jobs Plan GOP Seeks New Assault On Biden’s Economic Plans Calls Growing From Lawmakers For IRS To Extend Submission Deadline MORE (Texas), a senior Republican on the Ways and Means Committee, told CNBC this week. “At the end of the day we’ll see slower hires, [and] we will see less investment in the US “

Democrats remain undaunted. Infrastructure was one of only three named policy priorities they defended on the 2018 campaign trail, when they won control of the House. And after COVID-19 relief, it remains Biden’s top domestic priority, who is already using the pulpit to sell his plan to the general public.

If the early debate is any indication, the Democrats’ pitch will lean heavily on the concept of “ fairness. ”

“You have Amazon – whose entire business is built on an adequate infrastructure – and they paid 1.2 percent and zero last year [percent] the two years before. And they made $ 30 billion, ”said Yarmuth.

“That’s not fair in anyone’s book.”