South Dakota’s John Thune — the number two Senate Republican — was on Fox News Sunday morning talking about Biden’s proposed $2.25 trillion infrastructure bill:
I think the tax increases that are included in here are something that would be very crushing to the economy. You’re talking about increasing the rate from 21% to 28% or a 33% tax increase on businesses in this country who are looking to create jobs. . . .
There’s so much wrong with that statement.
Putting the top corporate rate halfway back up to the 35% it was under Bill Clinton would not “crush” the economy — in Clinton’s eight years, 18.6 million private sector jobs were created! The economy did great! And so did wealthy people, even though he hiked their personal tax rate as well.
The economy didn’t do terribly in the Fifties, Sixties, Seventies, and Eighties, either. Remember?
Back then, the corporate rate was around 50%.
Because corporate taxes are levied only on profits — and half a loaf is better than none — business owners try to make profits no matter where the rate is set. New investments will be made, and new workers hired, if they promise profits. Low rates won’t cause hiring if the employer doesn’t need more employees.
I do get that most big companies arrange things to avoid taxes — sometimes by going overseas. But Trump’s cuts didn’t bring them back; and Janet Yellen has a better idea: instead of joining the race to the bottom, let’s fashion a global minimum corporate tax rate. Ours is not the only government that needs tax revenue.
Redirecting $300 billion a year to infrastructure for eight years, as the President proposes, far from crushing the economy, will boost it.
It would be crazy not to make this investment!
Think of it like World War II, when no serious person argued against raising taxes and going into debt to win the war. This time, we’ll be raising taxes and going into debt not to blow things up, but hiring millions of blue collar workers to build things that will last for decades and enhance our productivity, our health, and our prosperity.
Three hundred billion here and three hundred billion there . . . and pretty soon you have a robust, revitalized, 21st Century infrastructure.
It’s past time to get the country back into shape.
Here’s a novel approach to funding infrastructure, brainchild of Regeneron CEO Leonard Schleifer, that I’ve posted before. If we find we need to go bigger than $2.25 trillion, we should add it to the mix.
A face-saving way to get Manchin and others on board might be to settle for 26.75% instead of 28% — but make up the difference by throwing the Tax Excessive CEO Pay Act into the mix. It would send all the right Democratic signals. The extra corporate tax would be VOLUNTARY. To avoid it, a company would need only to pay its workers more and/or its CEO less.
Almost everyone agrees inequality in the U.S. has reached obscene, dangerous levels. This would help to push things back toward sanity; and to the extent it didn’t, it would raise much needed additional revenue. A win either way.
Speaking of inequality (and, yesterday, injustice), listen to Planet Money’s story of How Jacob Loud’s Land Was Lost. Gripping, maddening — but ultimately hopeful, because years of hard work have righted this wrong in 17 states, including 8 in the South.