Senate Democrats still are reeling from the major tax cuts President Trump signed into law in December. On Wednesday they proposed undoing some of them in order to pay for a $1 trillion infrastructure plan.
“Rather than cutting existing infrastructure projects to pay for a paltry program, we want to roll back the Republican tax giveaways to big corporations and the wealthy and invest that money instead in job-creating infrastructure,” Senate Minority Leader Charles Schumer (D-N.Y.) said at a news conference. Of course, those tax giveaways have resulted in employees getting bonuses and profit shares.
This comes after Democrats have been meeting over recent weeks to discuss their desire to repeal parts of the new tax law that they say benefits wealthy individuals and corporations if they are able to take back control of Congress. The plan shared on Wednesday announces details about what changes Democrats would make to the law.
Schumer and his crew are proposing reinstating a top individual tax rate of 39.6 percent, which was lowered to 37 percent under the new law. They also want to increase the corporate tax rate from 21 percent to 25 percent. Under the former code, the same rate was 35 percent.
Democrats are also proposing to restore the individual alternative minimum tax and the estate tax to the 2017 rules. Under the new law, the exemption amounts for both taxes were increased. And they also plan to close the carried interest “loophole” that benefits investment-fund managers.
Responding to the Democratic announcement, White House deputy press secretary Lindsay Walters said, “Only tone-deaf Democrats could think the proper response to the booming Trump economy, higher wages and hardworking Americans keeping more of their own money is to reverse the policies that got us here.”
“President Trump is growing the economy for all Americans so that we can continue to deliver lowers taxes AND 21st-century infrastructure, because that’s what the people deserve,” she added.
After rolling back the tax cuts, the Democrats plan to use the revenue raised to pay for infrastructure. They propose spending $140 billion to ensure that the highway trust fund is solvent. They would spend another $140 billion on roads and bridges and $40 billion on high-speed internet.
Trump’s infrastructure plan relies on state and local governments as well as the private sector to make the most of the new investments. But Democrats have criticized the plan arguing that significant federal funds are needed and Trump’s plan would lead to more toll roads.
“Our plan would do three things compared to the president. First, create many more jobs than the Trump plan. Second, build many more projects than the Trump plan, and third, build the infrastructure America actually needs,” Schumer said.
Senate Democrats will promote their plan as they hit the campaign trail ahead of this year’s midterm elections.
“This will be a major thing we will talk about,” Schumer said. “And the contrast between tax cuts for the wealthiest people as opposed to middle-class jobs is one we will forcefully advocate in the fall.”
Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, said that Democrats will also stress “all the efforts we made to be bipartisan” and the missed opportunities for Democrats and Republicans to work together.
But Senate Environment and Public Works Committee Chairman John Barrasso (R-Wyo.) said the Democrats’ proposal is “about raising taxes.”
“The Democrats’ plan is clearly about raising taxes on American families not upgrading our roads, bridges, and water systems. We need a robust and fiscally responsible infrastructure plan that will help, not hurt, America’s economic growth,” Barrasso said.
The Democrats’ plan was praised by infrastructure and environmental groups, “We appreciate the Senate Democrats’ proposal to fund transportation and other infrastructure needs,” said Marcia Hale, president of Building America’s Future. “Senate Democrats believe, as we do, that legislation must include robust federal funding to rebuild our American infrastructure.”
RATE Coalition, a group of companies working to lower corporate tax rates during the tax-reform debate, blasted Schumer’s plan,
“Unfortunately, the proposal released today by Senate Democrats would raise the tax rate responsible for putting more money in the pockets of over four million Americans,” the group said.
What are your thoughts about Schumer’s announcement? Do you think he is putting the cart before the horse?
Credit: The Hill