You can see how the argument fares. Transportation Secretary Pete Buttigieg sounded perfectly reasonable at Meet the Press on Sunday when he argued, “We’re just asking companies to pay their fair share at one rate … that would be less than for most of my life.”
Businesses have a hard time screaming poverty. Last year, the Institute for Taxes and Economic Policy found 55 large companies that paid no federal income tax at all: “The tax-avoiding companies represent various industries and, according to their annual financial reports, achieved a combined US pre-tax income of almost 40.5 billion US dollars in 2020 . “If they had actually paid at the current rate of 21 percent, they would have paid a total of $ 8.5 billion, the institute found. Instead, these companies received “$ 3.5 billion tax breaks.” In short, “Your total 2020 corporate tax break, including $ 8.5 billion in tax avoidance and $ 3.5 billion in rebates, is $ 12 billion.”
In contrast, Senator Roger Wicker (R-Miss.), Whose state is ranked by CNBC as the 10th worst infrastructure in the country, complained on the same broadcast: “How could the president expect bipartisanship in his proposal? is a lifting of one of our signature problems in 2017, where we cut the tax rate and finally made the US more competitive when it comes to the way we deal with job creation? “The problem with that statement is that tax cuts have certainly been cut earlier; For example, George W. Bush’s tax cuts were reduced back in 2013.
Under President Barack Obama, Congress agreed to “phase out cuts in income, capital gains, and dividend tax rates for applicants with taxable income in excess of $ 450,000 for married couples and $ 400,000 for singles,” wrote Chye-Ching Huang of the Center on Budget Political Priorities in 2013. In addition, restrictions on personal exemptions and individual allowances were reintroduced for those with an adjusted gross income greater than US $ 300,000 for married couples and US $ 250,000 for individual applicants. As a result of these changes, employment growth continued to rise, despite the GOP claiming the adjustments would lead to bankruptcies and recessions. (Associated Press reported a 2016 study on the impact that “President Barack Obama’s tax hikes for wealthy Americans in 2013 neither slowed their income growth nor hurt the economy,” and that employers in 2014 and 2015 saw 5.8 million jobs had created – “the strongest two-year growth since the late 1990s.”)
Wicker’s reasoning is also shaken because the 2017 tax cuts, which were intended to boost growth and investment over the long term, led to negligible results. “Company revenues were about $ 40 billion below forecast, while individual revenues were higher and total revenues fell by about $ 9 billion,” the Congressional Research Service found in 2019. “Real wages grew more slowly than GDP,” said these researchers: at a rate of 2 percent compared to 2.9 percent for total gross domestic product. “Such slower growth has occurred in the past. The real wage rate for manufacturing and non-regulatory workers increased by 1.2%. “
This wasn’t surprising, as tax cuts are proving to be a poor way to boost growth. (“Analyzing data from six decades showed that top tax rates” had little to do with saving, investing or productivity growth, “reported the Atlantic in 2012, analyzing another study by the Congressional Research Service. The study found that lowering capital gains taxes and the top tax rates have led to greater income inequality. “)
Wicker made an interesting admission:
I would like to see evidence that a slight increase in corporate tax to pay a gigantic infrastructure bill will be a net job loser. (Studies from Georgetown University and Moody’s Analytics predict significant employment growth.) But perhaps there is one level that Wicker thinks is acceptable: 25 percent? 26 percent?
Regardless of the economic data, Republicans will argue on behalf of their corporate donors that a tax hike would be disastrous. But it’s a good bet that the public will overwhelmingly reject this argument. After grappling with tax cuts that are of little use to the nation as a whole for the past four years, American corporations should prepare for a tsunami of assistance to only partially raise their taxes to 35 percent.