Politics Republicans go after "woke" corporations — but want to keep massive corporate tax cut
Biden's capital gains tax hike to 39.6% will send rates soaring
President Joe Biden's proposed tax hike will cost high-earning Americans in more than a dozen states upwards of 50% on their long-term capital gains and other qualified dividends. Nearly doubling the federal capital gains rate could discourage those making more than $1 million from investing in the stock market as it’s increased from 23.8 per cent to 39.6 per cent, which would lower the GDP by 0.1 per cent and reduce federal revenue by around $124 billion over 10 years, according to the Tax Foundation.
U.S. Sen. Ted Cruz (R-TX) Stefani Reynolds/Getty Images
Republican lawmakers have threatened to crack down on corporate tax cuts and subsidies even as the party mounts a unified front to defend the Trump tax cuts that dramatically slashed the corporate tax rate to its lowest level in decades.
Republicans have railed against President Joe Biden's proposed tax increases on corporations and the wealthy, repeatingthat a slight increase in the corporate tax rate would make the United States But Republicans aren't just battling the Biden administration. They're also up against a growing majority of Americans demanding big business pay their "fair share."
Biden testing Democratic appetite for taxing the wealthy with capital gains proposal
Some Democrats on Capitol Hill are wary of President Joe Biden’s pitch to nearly double the capital gains tax for the wealthy, meaning that the proposed hike will almost certainly land at a lower level. © Provided by Washington Examiner Biden wants to pay for his American Families Plan, a $1.8 trillion package focused on childcare and families, by increasing the top individual income tax rate to the pre-2017 level of 39.6% and taxing capital gains for households making more than $1 million as ordinary income.
Alast month found that 65% of voters, including 42% of Republicans, support a corporate tax hike to fund infrastructure investments. A last week found that 81% of Americans are bothered that "some corporations don't pay their fair share," including 59% who said it bothered them "a lot." An April Quinnipiac poll even found that voters are Biden's infrastructure proposal if it hikes taxes on corporations, putting Republicans who have spent decades defending corporate tax cuts in a bind.
Some Republicans have amped up their newfound anti-corporate rhetoric after former President Donald Trump spent years attacking large corporations, even as he cut their taxes from 35% to 21%. Sen. Ted Cruz, R-Texas, lashed out at "woke" corporations in aprompted by corporate criticism of a slew of Republican voter restrictions in response to Trump's election lies. Cruz claimed he would swear off corporate PAC money and threatened — but did not actually promise — to reject future tax cuts.
Biden's corporate tax plan takes aim at income inequality
WASHINGTON (AP) — From John Kennedy to Ronald Reagan to Donald Trump, American presidents have taken aim at corporate America's tax-avoidance schemes before — and mostly missed. Now, President Joe Biden is training the government’s sights again on the loopholes, shelters and international havens that have long allowed multinational companies to dodge taxes in ways that ordinary households cannot. The idea is twofold: First, to help pay for Biden's trillions in proposed spending — for everything from roads and bridges and green energy to internet access, job training, preschool and sick leave.
"When the time comes that you need help with a tax break or a regulatory change, I hope the Democrats take your calls, because we may not," Cruz wrote while criticizing tax breaks for companies like Coca-Cola and Boeing.
Sen. Josh Hawley, R-Mo.,on Twitter and criticized corporate America for putting "Americans last." After last year's election, Hawley , "we are a working-class party now. That's the future."
Cruz went even further in an interview withon Friday, acknowledging his shift in response to the "rising populist movement."
"I think the most important political change of the last decade has been a socioeconomic inversion. Historically the caricature, at least, was that Republicans were the party of the rich and Democrats were the party of the poor," he said. "I believe that is precisely opposite to where we are today. Democrats today are the party of rich coastal elites and Republicans are the party of blue-collar workers."
Republicans are crusading against 'woke'
Yet lawmakers and operatives who spoke to NBC News varied in how they define the idea, while others said they didn't know much about "wokeness" at all.Conservatives en masse have blasted "woke" companies that spoke out against Republican-led voting restrictions — a move that publicly aligned much of corporate America with Democrats on the issue, even if many of the businesses stressed their beliefs that access to the ballot shouldn't be a partisan issue.
Given the overwhelming poll numbers in favor of taxing corporations, it isn't surprising to see two presidential hopefuls try to latch on to the anti-corporate sentiment that has grown in the Trump era, although there is little evidence to back Cruz's assessment about an "inversion" between the two parties. But their statements are ironic given that both Cruz and Hawley backed Trump's corporate tax giveaway while their party, which has pushed to increase corporate power for decades, rejects any corporate tax increases.
"What Ted Cruz does and says are two very different things," longtime Democratic pollster Geoff Garin told Salon, predicting that "he will continue to take the calls of corporate CEOs, and take their money too, whatever his tweets might say."
Senate Minority Leader Mitch McConnell, R-Ky.,that there will be "none, zero" support from Republicans for Biden's proposal. "We're not willing to pay for it by undoing the 2017 bill," he added, calling it the Trump era's "most significant domestic accomplishment" even though it failed to meet any of the party's stated goals, such as higher , or .
Fox News Host Confronts GOP Sen. Cassidy Over Trump Tax Cuts Adding $1.5Tn to Deficit
"What's wrong with raising the top tax rate to where it was during the Bush and Obama administrations in order to help the working and middle class?" Chris Wallace asked the Republican lawmaker.Although the Republican-backed Tax Cuts and Jobs Act and its impact on the deficit have been publicly discussed since before they were passed, the tax cuts have drawn renewed scrutiny as Democrats and President Joe Biden have proposed repealing them and raising taxes on the wealthy. GOP lawmakers have balked at this proposal, arguing that tax cuts have benefited the economy and workers.
Rep. Kevin Brady, R-Texas, the author of the 2017 tax bill,that "there's going to be a real fight over these tax increases" because "we shouldn't be funding infrastructure on the backs of American workers."
But Brady's party is pushing a bill that would shift the entire tax burden of infrastructure investments from corporations to workers, while Biden has so far made good on his promise not to raise taxes on households earning under $400,000 per year. Congressional estimates show that the vast majority of Americansunder Biden's policies and those making less than $75,000 will, on average, owe no federal income taxes this year. Most of Biden's proposed tax cuts target big businesses, multinational corporations and those earning over $500,000, although his proposed corporate tax increase to 28% would not even fully reverse Trump's cut.
Republicans, who have long espousedthat their tax cuts boost the middle class, have offered Biden a counterproposal, investing less than a third the amount in Biden's plan, entirely funded by "user fees" that would primarily hit lower-income workers. Even Sen. Joe Manchin, D-W.Va., who has to reduce Biden's proposed corporate tax hike, slammed the GOP proposal for making it
Exclusive — Cruz, Rubio ramp up criticisms of big business
It's a strange time for the relationship between Republicans and big business.Important figures in a party that usually toes the pro-business line are instead throwing jabs at the corporate world. The critics include several potential 2024 presidential contenders.Their barbs will not be well-received in boardrooms or the Chamber of Commerce. Democrats will roll their eyes and allege opportunism. But an anti-elite GOP base that grew even more populist during former President Trump's time in the White House could reward the pugnacious tone.Sen.
"Hell no, don't raise them!" Manchin told reporters last week, warning that commuters would be hit the hardest.
The Republican plan calls for about $568 billion in spending that would be paid for with fees like gas and mileage taxes,, R-Utah.
"My own view is that the pay-for ought to come from people who are using it," Romneylast month.
But it's unclear how much new funding the bill actually includes, as opposed to funds it seeks to reallocate from other appropriations and also unclear how much money these user fees can actually raise, Michael Graetz, a Columbia tax law professor who served as a top Treasury Department official, said in an interview with Salon. Aanalysis found that the GOP plan may only include about $189 billion in actual new funding.
Graetz said he was skeptical of the Republican proposal because Republicans have opposed gas tax increases for nearly three decades.
"You have to at least question how sincere they are about user charges," said Graetz, the author of "The Wolf at the Door: The Menace of Economic Insecurity and How to Fight It," adding that it would take a long time to raise significant revenues from these fees and they are unlikely to raise significant amounts of money.
While user charges, like tolls to pay for bridge and highway construction, are common and sensible, infrastructure projects are "longterm investments that you can't pay for all at once without overburdening people and then having a project that's not completed," Graetz explained.
Business groups target moderate Democrats on Biden tax plans
Business groups are gearing up to make the case against President Biden's proposed tax increases, with lobbyists increasingly focusing their attention on moderate Democrats.Congressional Republicans are expected to uniformly oppose Biden's plan to raise taxes on corporations and wealthy individuals to finance his economic recovery packages. That's freed up K Street opponents to focus on Democrats, who have razor-thin majorities in the House and Senate.Groups like the U.S. Chamber of Commerce are targeting pro-business moderate Democrats in hopes of steering the conversation away from corporate taxes as a way to pay for infrastructure spending.
"I'm not sure if this is a serious proposal," Graetz added of the GOP plan. "Democrats are likely to oppose it because user charges will affect everyone who drives across the road or the bridge. And to the extent that it increases transportation costs on railroads or airplanes or automobiles, anyone who uses that infrastructure will pay for it. So it's not limited to people of any particular amount of income, and they pass it on to consumers in the form of higher prices. Consumers will pay for it. The distributional aspects of Biden's plan certainly appears to be significantly more progressive."
It's not clear what the extent of these user fees will be, stressed Zach Liscow, a tax policy expert at Yale Law School, and some can be used to "discourage behavior that is bad for society," such as overly congested highways.
"However, there is little indication that Republicans intend to target problems like excessive traffic and pollution," he told Salon. "In any case, even if user fees do target social problems, if doing so disproportionately targets the pocketbooks of lower-income families, that needs to be traded off with whatever benefits come from targeting the social problems."
Since corporations stand to benefit the most from improved infrastructure, "it is arguably fair to tax them to pay for it," Liscow said. "Unless the user fees target activities that are bad for society or policymakers actually want to target lower-income parties with their revenue collection, there aren't good reasons to use user fees instead of corporate taxes to fund infrastructure."
Biden defended his proposals on Monday, emphasizing that this spending will go toward investments in fixing bridges and roads, clean water and green energy, as well as other programs that would fund child care, free community college and aid to families.
"I think it's about time we start giving tax breaks and tax credits to working-class families and middle-class families instead of just the very wealthy,", adding that "trickle-down economics has never worked. For too long, we've added an economy that gives every break in the world to the folks who need it the least. It's time to grow the economy from the bottom up and the middle out. … We can choose to invest in our students. We can choose an economy of rewards work, not just wealth."
Battle over tax hikes muddies the GOP's post-Trump push to be the party of the working class .
By forcing the GOP to choose between defending corporate tax cuts and creating more blue-collar jobs, Biden's move undermines Republicans' rebranding plan.Over the past decade, the share of Americans with only a high school education who identified as Republicans has risen by more than 10 points, from 34% to 45%, according to NBC News/Wall Street Journal polling.