When asked whether the country needs an infrastructure upgrade, Republicans were quick to affirm it does. “Absolutely,” Sen. Roy Blunt of Missouri told Fox. “There’s no doubt that Mississippi could use” the money, Gov. Tate Reeves said on CNN. “We need it,” Sen. Roger Wicker of Mississippi agreed on “Meet the Press.”
Bipartisanship ahoy? Not so fast — Republicans don’t like the Biden plan’s corporate tax increase, which would raise rates to 28 percent (a level that preserves half of the rate cut imposed during Donald Trump’s presidency). “What the president proposed this week is not an infrastructure bill. It’s a huge tax increase,” said Wicker. “We don’t have to hike taxes by $2 trillion,” complained Reeves.
So how would Republicans pay for upgrades that they agree are needed? Well, there they sound pretty much stumped. “I’m open to suggestions about that,” said Wicker. “One way you pay for it is by seeing significant improved economic growth,” suggested Reeves — which, as CNN host Jake Tapper pointed out, “doesn’t really answer the question.”
The closest attempt at an answer came from Blunt, who suggested paying for a scaled-down package with, among other things, a tax on electric vehicles and driverless cars. But that proposal was in some ways more telling: Blunt’s rationale — that those who benefit from improved infrastructure should fund it — could just as easily apply to the companies that benefit from better roads, bridges and the like as it could to the ordinary Americans who drive on them. Rather than at least splitting the difference between the more equitable corporate tax increase and the regressive taxes on drivers, Blunt would lump the entire burden on drivers.
What makes the GOP intransigence particularly silly is that it’s in defense of a corporate tax cut that didn’t work — for most Americans, that is. When Republicans slashed the corporate tax rate as part of a broader tax reduction in 2017, they predicted that a lower rate would boost companies’ return on investment, raise Americans’ wages and help the bill pay for itself. Even before the pandemic, however, none of those promises came to pass. After an initial bonanza, investment fell short of GOP hopes, with most of the money instead used for dividends and stock buybacks. Wages didn’t rise because of the cuts. In 2019, the Congressional Budget Office estimated that the law paid for only one-fifth of its cuts.
But one suspects that Blunt, Wicker and others are protesting this proposed tax increase because of the narrow portion of Americans for whom the 2017 cut did work: the wealthiest. The dividends and stock buybacks benefited rich investors. Meanwhile, according to a new study from the Institute on Taxation and Economic Policy, “At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits.” And you know those “savings” aren’t going back into workers’ paychecks.
Remember, whenever the Trump administration launched one of its many ill-fated “infrastructure weeks,” Republicans rarely balked at the price tags — not because those proposals were always funded but because they didn’t make the wealthy and big business pay more of their fair share. So if Biden does sit down with Republicans to talk about paying for an infrastructure package, everyone in the room should be clear on one thing: Republicans don’t really care if this bill — or any other Democratic bill — is paid for. They just don’t want their friends covering the cost. The good news for Democrats is that view is a loser with voters.