Reverse Part of Trump's Corporate Tax Cut to Pay for Revitalizing America's Infrastructure
Economists from across the political spectrum agree that America needs to repair and upgrade its crumbling infrastructure in order to expedite our rebound from the pandemic, address red state economic decline, and remain the world's dominant economy in the 21st century. The Biden administration has a plan to address infrastructure and it should be a top priority for Congress.
Brookings.edu: "The Biden administration recognizes the potential for a well-designed, large-scale federal infrastructure investment program to close critical gaps, put Americans back to work, and correct economic, racial, and social inequities in employment."
One of the issues Republicans have raised about an infrastructure bill is the cost. The price tag would likely approach $2 trillion dollars. Reversing Donald Trump's irresponsible corporate tax cuts are a good place to find much of the money needed to fund the initiative.
Axios: " While many senators are signaling that President Biden’s next big-ticket bill must come with a way to pay for it, the White House and its Democratic allies are growing confident they can get there, in part, by increasing corporate taxes."
“We should pay for this once-in-a-generation infrastructure package, “ said Sen. John Hickenlooper (D-Colo.). “I’m eager to work with my colleagues on how to achieve this goal, including responsibly setting the corporate tax rate.”
Trump's 2017 corporate tax reductions created a significant hole in the nation's budget and accomplished little more than further enriching the wealthiest Americans, and exacerbating income inequality in the United States.
Illuminate: "As many economists predicted, corporations which received a massive tax cut in 2017 didn't use much of their windfall to hire more workers or increase wages. Instead they increased dividends and repurchased their own stock making outstanding shares more valuable and enriching investors."
The non-partisan Tax Policy Center has been analyzing the results of Trump's corporate tax cuts since they were passed in 2017.
Tax Policy Center.org: "Who benefited from the corporate tax rate cuts? Shareholders in the short run, which could last many years. Under basic finance theory, an increase in the stream of after-tax profits expected in the future should, immediately, translate into higher stock prices."
"And who are these winners? Foreign investors own roughly 35% of total US equity (public and private). And for US investors in equity, the top 1% own about 57% of shares while the bottom 90% own about 12%."
"And who lost? Future generations, who eventually must repay the staggering US debt. The TCJA will add almost $2 trillion to nation’s nearly $18 trillion public debt over 10 years, of which about $1.4 trillion was attributable to corporate income tax rate cuts."
"So, what did the TCJA’s corporate tax rate cuts bring us? Tax cuts for shareholders—who tend to be rich, including a sizable block of foreigners—and, eventually, tax increases or spending cuts for the rest of us."
Rolling back part of the corporate tax cuts would provide much of the money needed to repair and modernize America's infrastructure. And that would mean better jobs and higher wages for the nation's workforce. Brookings summed it up this way a few days ago.
Brookings.org: "Beyond short run job creation, federal infrastructure investment can have several other positive effects. Boosting employment would increase aggregate demand and could put upward pressure on wages. As many studies have shown and policymakers increasingly recognize, running a high-pressure economy can be an effective way to reduce income inequality and narrow racial and gender wage gaps (provided it’s accompanied by complementary policies). Moreover, improving the nation’s infrastructure would increase long-run productivity growth." ...
Joe Biden's infrastructure bill should be Congress's next priority.
By: Don Lam & Curated Content