President Joe Biden continues to advocate for a 28% corporate tax rate to fund his multi-trillion-dollar infrastructure spending plan, even if it takes 15 years to cover the cost. Republicans and many moderate Democrats are opposed to the proposal, with both sides arguing it would make the United States less competitive and hurt wage growth. Since any tax hike is low-hanging fruit for conservatives and libertarians, does standing in opposition to raising corporate confiscation rates depict a maverick or somebody merely playing it safe in a tense political climate? Perhaps Senator Susan Collins (R-ME) can be asked this question.
A Susan Collins on the Rocks
Collins recently sat down with CNN to share her opinion of Biden’s plan to pay for his $2.25 trillion infrastructure scheme. The Maine senator — considered one of several crucial votes in the anything-goes 50-50 Senate — voiced her resistance to the 28% figure emanating from the White House, warning about offshoring jobs:
“Let me tell you what I won’t support. I won’t support American businesses paying the highest corporate tax rate among developed countries in the world once again, and, unfortunately, that’s what 28% would be. And that means that jobs would once again go overseas.”
Collins stopped short of how much she would be willing to compromise. However, the veteran senator did showcase her support for the $568 billion counter-proposal that concentrates on traditional infrastructure instead of the progressive goodies list in Biden’s package. It includes $299 billion on roads and bridges, $35 billion on drinking water, and $65 billion to expand broadband access.
She did not say how it would be funded, calling it “premature” to discuss the minute details of an infrastructure program that has yet to be agreed upon by either side.
“Well, at this point, I think now that the Republicans have put forth a reasonable offer, it’s up to the president to do a counteroffer to us,” Collins told CNN’s State of the Union. “That’s the amount that we spent to win World War II. So this is an enormous package when you take both the traditional core infrastructure parts and the huge expansion of social programs that the president is advocating.”
For the Democrats, it comes down to convincing at least ten Republicans and potentially two other Democrats – Sen. Kirsten Sinema (D-AZ) and Sen. Joe Manchin (D-WV) – to support their infrastructure legislation. The party could also employ budget reconciliation, a fast-track measure that would contradict the president’s promise of unity.
Art of the Deal or 4D Chess?
Is Biden taking from the pages of fo rmer President Donald Trump’s Art of the Deal? Or is 46 playing a game of 4D chess with the GOP faithful? Financial markets seem to believe that the White House will not be proceeding with a 28% corporate tax rate. Instead, the Oval Office is using this high rate to potentially get a more desirable 25% magic number that moderates think is a more reasonable figure. Even if that were the case, the decade-and-a-half revenue generation might fall short of covering the bill’s exorbitant seven-year price tag. In politics, 15 years is a lifetime. Most voters will not even remember a trillion-dollar spending program when the federal government will inevitably move ahead with a handful of those by the time the nation reaches the year 2036.
Where Were the Republicans?
During the 2016 election, Trump pledged to spend $1 trillion over a decade on America’s infrastructure. Each year throughout his term, the White House would announce an announcement. Nothing substantial came to fruition except slashing the regulatory red tape of building roads and highways. He ostensibly had the votes, so who knows what happened between him and his Cabinet officials in charge of this file? Maybe Transportation Secretary Elaine Chao was too busy, reportedly bringing family members to government meetings where they had a financial interest. Perhaps this is what Trump meant when he said he was against public-private partnerships. In other words, beware corporatism.
Read more from Andrew Moran.