Biden's infrastructure plan takes aim at Trump's biggest economic achievement
By: Brian Faler (POLITICO)
No doubt Democrats will slip in a provision to eliminate the cap of SALT deductions, too. Democrats were especially outrage by that tax increase.
Make no mistake, Democrats are pursuing a tax increase on consumers. Consumers provide all the money that corporations use to pay taxes. And a tax increase only provides justification for price increases. The wealth certainly won't be paying more.
The rich cannot become richer in a market economy without selling something. Consumers are the only source of money in a market economy. Imposing taxes on what consumers buy means consumers will provide the money for the tax. Allowing the rich to become tax collectors for the government will only allow the rich to become richer.
Joe Biden is proposing supply-side, neo-liberal taxing policy that benefits the rich by allowing the rich to become tax collectors for the government. Biden is shifting the burden of his political largess onto the shoulders of consumers. The rich will feed at that trough like pigs.
Hasn't anyone noticed that income and wealth disparities increased when the corporate tax rate was higher? Hasn't anyone noticed that the accounting numbers used by the Dept. of Commerce has been rigged to hide inflation? Hasn't anyone noticed that under higher corporate tax rates the United States was for sale to the highest foreign bidder?
Joe Biden is deliberately trying to avoid taxing the rich. If Biden wanted to tax the rich then he would be proposing a progressive income tax instead of shifting the burden onto consumers.
S E E D E D C O N T E N T
President Joe Biden is using his infrastructure plan to take aim at President Donald Trump's signature economic achievement: his corporate tax cuts.
The administration is calling for $2 trillion in new spending on roads, bridges and a myriad other projects, and sticking big companies with the bill. To defray its cost, his plan would roll back Trump's cut in the corporate tax rate — Biden would hike it to 28 percent, from 21 percent — while stiffening a minimum tax on multinational corporations.
That will set the stage for a split-screen debate in Washington in the coming months: Even as Democrats haggle over how to divvy up that $2 trillion, they will simultaneously relitigate — and, they hope, overturn — the centerpiece of Trump's economic legacy.
While Democrats cast the tax increases as a matter of fairness, they also hope it will make good politics. The coming fight promises to reignite a debate over how much corporate taxes matter for the health of the economy, not to mention the political fortunes of lawmakers.
"This bill is about both highways and highway robbery of our Treasury," said Rep. Lloyd Doggett of Texas, a senior Democrat on the tax-writing House Ways and Means Committee.
"The plan cracks down on corporate tax dodging — and that will help fuel and fund the roads, jobs, clean energy and broadband that American families have long needed," he said.
Republicans including Trump — and much of the business community — swiftly denounced the plans.
"Biden's ludicrous multitrillion-dollar tax hike is a strategy for total economic surrender," Trump said in a statement Wednesday. "Sacrificing good paying American jobs is the last thing our citizens need as our country recovers from the effects of the global pandemic."
Republicans didn't get much traction with their arguments for the tax cuts in the first place — making the U.S. tax system more globally competitive — and Democrats believe they won't do much better this time around, especially with millions out of work.
At the same time, raising taxes is rarely easy, and increasing rates on corporations should be something Democrats can rally around — no small consideration given their tiny majorities in the House and Senate.
Democrats have complained for years that the 2017 tax cuts gave away too much to big businesses, with its 40 percent reduction in the corporate tax rate and a big new deduction for investing in things like factories and equipment.
Corporate tax bills plummeted in the wake of the law.
The average tax rate on big companies fell by more than half to 7.8 percent in 2018, according to the official Joint Committee on Taxation. And despite a strong economy before the pandemic hit, corporate payments to the Treasury fell to the lowest levels since the Great Recession.
Republicans have long defended the tax cuts, saying they were trying to fix a dysfunctional corporate tax system.
Before their 2017 changes, the U.S. had the highest corporate rate among developed countries, and many companies were stockpiling profits overseas to avoid the tax. A growing number of companies were moving their headquarters abroad in so-called inversions to escape the IRS.
But that argument fell flat with many voters, and Democrats handily won the public relations battle pointing to things like a wave of stock buybacks on Wall Street.
Biden wants to increase the corporate rate to 28 percent, which is actually what the Obama administration had proposed when he was vice president. That would raise about $700 billion.
He would generate even more savings with a flurry of other, more arcane, tax increases with acronyms like QBAI and FDII, that won't mean much to average voters but will set off alarm bells in corporate tax departments.
Many of those provisions focus on toughening a minimum tax known among experts as "GILTI" that Republicans imposed as part of their 2017 law on U.S. companies operating overseas.
Biden would double its tax rate, eliminate a special deduction against the levy and change how companies go about calculating the tax, among other things.
Democrats contend the targeted provisions encourage companies to move their operations overseas, though the evidence is hardly clear on that score.
Investment and jobs in the U.S. increased in 2018, the first year the Tax Cuts and Jobs Act was in effect, according to JCT.
Republicans say Democrats’ plans will recreate a lot of the problems they were trying to solve because it would leave the U.S. once again with a high corporate tax rate compared to other developed countries.
Under Biden’s plan, businesses would face a combined 32.3 percent corporate tax, including state levies, which would be the highest among developed countries in the Organization for Economic Cooperation and Development. (Excluding the US, the average corporate tax among OECD countries is 23.4 percent).
“Hastily changing the tax system purely for purposes of raising revenues will bring back inversions and foreign takeovers of U.S. companies,” said Sen. Mike Crapo, the top Republican on the Finance committee.
The administration acknowledges the risk of more inversions but says it can address the issue through regulations while also pressing other countries to adopt similar approaches to taxing corporations.
Tags
Who is online
92 visitors
Once a neo-liberal, always a neo-liberal. And Joe Biden is a neo-liberal.
Biden wants to raise taxes on what consumers buy. Guess where the money will come from to pay that tax?
Joe Biden is deliberately trying to avoid increasing taxes on the rich. Biden isn't proposing a progressive income tax.
Neo-liberal? So... A new liberal? Really? There's something new about Biden? I don't think so.
Honestly, if you really want to tax the wealth of the rich the capital gains tax is where you need to go.
What capital gains? It should be earned income. But the stock manipulators in Congress won't allow that.
The wealthy that made billions off of Trump's tax cuts?
Where does the wealthy get their money? The rich aren't getting richer by playing lotto. In a market economy no one can get rich if they aren't selling something.
Consumers provide the money that make people wealthy. There isn't any other source of money in a market economy.
Haven't you been paying attention? The middle class is funding Trump's billionaire tax cuts.
Yup, the actual taxpayers.
Straight to another strawman argument Texan? Aren't you going to dance around first? Asking me to define the middle class? Asking me to list all the billionaires and how much each got specifically?
Instead you are going straight to a strawman argument trying to get me to respond to a position I have never mentioned. Are you too tired today to dance around first? Has it been a long week?
Of course not. Trump's tax cuts (Like the Bush tax cuts) were across the board; but the left are hung up on the tax cuts for the 1%.
Damn the man for giving working US citizens a tax cut. He even raised the deduction amounts for couples filing jointly, single filers, and heads of house holds.
Of course Democrats are really steamed that Trump capped the SALT tax deduction, and burned blue states that over tax their citizens.
Very good. Now show me where, in those 2 sentences, I said anything about a tax increase.
You apparently live and die by your strawman arguments.
[delete]
How? I don't understand how the middle class is funding a reduction in government revenue.
If you mean the middle class is providing the money for the rich to become richer, that's true. Consumers, at all levels, are providing the money that makes the rich richer. Consumers provide the money for stock dividends, stock buybacks, and management bonuses, too. Whatever the rich are selling, they become richer when someone buys. Consumers provide the money for everything in a market economy.
So just say you don't know.
[Deleted]
Corporations who own the companies that sell products to the US consumer used to pay a supposed 35% tax rate, yet profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010, according to the Government Accountability Office. "
When the Trump tax cut that overwhelmingly favored corporations was passed, their nominal tax rate of 35% was dropped to 21% and the actual taxes paid dropped from an average of 17% down to somewhere between 0 and 10%.
Now conservative Republicans who supported these massive tax cuts that primarily benefited the ultra rich and corporations (and cost tax payers over $3 trillion) claim that raising taxes on corporations just passes those tax hikes on to the consumer and will effect hiring and employment, but the facts show that when corporations are given massive tax cuts they do not pass those savings on to the consumers, consumer goods prices did not fall at all but actually increased after Trumps tax cuts, and they do not hire more employees simply because they saved billions in taxes. Consumer prices and hiring are effected by supply and demand, not corporate profits as some dip shit conservatives would have you believe.
Raising taxes on corporations WILL NOT increase consumer prices, it will not be a tax on middle or low income consumers and will not have any great effect on employment. Those are fictions sold to you by the top 1% who wants to keep the middle and low income conservatives voting for their massive profits that will NEVER trickle down because trickle down economics is a fraud, it is a huge lie intended to garner support from gullible dumb shits at the bottom of society.
Continuing to suck the balls of corporate America as Republican leadership has been doing for decades will never result is lower prices for constituents or job growth, fair taxes on profits and capital gains are not strangling business. The fantasy of trickle down economics is a mirage where the extremely wealthy tell the middle and low income workers that they need to give the top 1% lots of money and tax breaks and that will somehow motivate the top 1% to be magnanimous and give middle income workers raises and hire more of them at lucrative salary's simply because their wealth is growing exponentially. The reality is that regardless of how big the top 1%'s wallets get, they will only hire employees at the lowest possible depressed labor rates that promise more profits for the top 1% and they don't hire superfluous employees simply because they have a lot of money in their pockets and they don't lower prices on goods simply because their profit margins are high.
The economy will do just fine if the corporate tax rate is raised, it will not effect consumer prices or employment, those are just threats from those who don't want to pay fair taxes and are often pushed by those who pay effectively zero in taxes currently. A company who goes from making $1 billion in profit isn't going to close up shop simply because their profits are only $800 million after taxes. Will we hear some of the top 1% whine and complain and threaten and blame any and all job number dips on their having to pay taxes? of course, but they are lying to you, only the most gullible dumb shits believe them.
Where do these corporations get the money to pay taxes? Doesn't matter if the corporate tax rate is 2 pct or 200 pct, where does the money come from to pay those taxes?
The reason that increasing corporate tax rates causes job losses is because the owners aren't going to pay more in taxes. If they can't raise prices enough to pay the taxes then they will lower costs through layoffs. Increasing corporate taxes is not a tax on the rich and won't do anything to address income and wealth disparities.
Quote all the statistics and twisted facts you wish; consumers are the only source of money in a market economy. Increasing taxes on what consumers buy is really just a tax on consumers.
The only way to force the rich to pay more taxes is to make income taxes progressive. The current Federal tax code on wages and income is working like a flat tax. The Federal tax code on wages and income is not progressive. That's the problem than needs to be addressed.
Joe Biden's proposal to raise corporate taxes is a political ploy to avoid increasing taxes on the rich. Biden knows what he is doing. We're going to argue about raising taxes on what we buy and that's supposed to make us feel better about paying more. That makes Biden's economic numbers look better because he can claim growth in consumption increased GDP. But consumers won't be able to buy more; they'll only be paying more for what they buy. Joe Biden is using a neo-liberal bar trick to rig the economic numbers without changing anything and protecting the rich with a political slight of hand.
Greedy progressives cannot understand the simple logic of this