White House press secretary Jen Psaki, at Thursday’s briefing, gave a preview of how the Biden administration will confront the predictable objections to its large infrastructure plan funded by corporate tax increases. Told that Senate Minority Leader Mitch McConnell (R-Ky.) had declared Republicans will fight the plan “every step of the way,” she cheerily responded that there was plenty Republicans and Democrats agree on. Everyone likes infrastructure!
“Where there is agreement with across the political spectrum from investment and infrastructure, doing more to be competitive with China, and what we’re really talking about here is how to pay for it,” Psaki said. “And so what we’re looking for is proposals of alternatives.” She then issued an implicit challenge: If Republicans don’t want to raise the corporate tax rate, what alternative would they offer? “We’re happy to hear those proposals,” she said.
In other words, the White House is fully aware that Republicans are in a box. Having declared themselves in favor of infrastructure for years, they either have to come up with a tax scheme that will fall far more heavily on ordinary taxpayers or give up their phony deficit mania (which does not apply to tax cuts, apparently). This puts Democrats in both the roles of being fiscal conservatives (pay as you go!) and defenders of working-class Americans. Republicans have the choice between embracing fiscal irresponsibility or giving up their laughable claim to be the party of working people.
Democrats are managing to avoid bashing businesses outright. Psaki pointed out that for 70 years or so, the corporate tax rate had been 35 percent until the last administration dropped it all the way to 21 percent (and loosened other rules allowing many big companies to avoid paying taxes altogether). President Biden’s proposal to push the rate up to only 28 percent is “incredibly reasonable,” she said. Later she reiterated that corporations that did not pay any taxes could “afford” to shoulder the burden of infrastructure investment.
Psaki was echoing the president’s comments on Wednesday, when he said, “In 2019, an independent analysis found that there are 91 … Fortune 500 companies, the biggest companies in the world, including Amazon that use various loopholes so they pay not a single, solitary penny in federal income tax. I don’t want to punish them, but that’s just wrong. That’s just wrong.” He added, “A fireman and a teacher paying 22%? Amazon and 90 other major corporations paying zero in federal taxes? I’m going to put an end to that.” (Amazon chief executive Jeff Bezos owns The Washington Post.)
This casts Republicans in the position of defending a mammoth tax “giveaway,” as Psaki dubbed the 2017 plan, at the expense of improving roads, delivering broadband, building new housing stock and other popular endeavors.
I do not expect Republicans will be shamed out of protecting corporate America’s huge windfall (even as they declare themselves the party of the little guy), nor do I expect them to support anything near the magnitude of Biden’s once-in-a-generation investment. But it seems that if it comes to it, the administration will be perfectly content to take the case to the voters and proceed without any Republican buy-in, just as it did on its covid-19 rescue plan. The question really is in the Republicans’ court: Do they want to run in 2022 on a platform of defending corporate greed and opposing infrastructure?