The spending would be offset by clawing back two-thirds of the revenue lost in the Republican tax bill by reinstating a top income tax rate of 39.6 percent, restoring the individual alternative minimum tax, reversing cuts to the estate tax, and raising the corporate income tax from 21 percent to 25 percent.
Senate Minority Leader Charles E. Schumer (D-N.Y.) said in an interview Tuesday that the plan sets up a stark contrast for voters ahead of the midterm elections.
“We believe overwhelmingly the American people will prefer building infrastructure and creating close to 15 million middle-class jobs than giving tax breaks for the wealthy,” he said.
Democrats are working to swing public opinion back against the GOP tax plan after months of stock market gains and corporations announcing worker raises and bonuses helped persuade the public that the tax package was a good thing. Now Democrats are trying to divert focus away from the middle-class benefits of the bill back to provisions that mainly benefit corporations and the wealthy, which account for the bulk of the cost of package’s cost.
“Now that Republicans are realizing that the president’s plan is a nonstarter, and some of them have voiced that, we hope that this will importune them to move in our direction,” Schumer said. “I think as they get closer to the election, and they need some real program, something big and significant to get done this year . . . they may move in our direction or at the very minimum propose a real plan with real dollars on their own.”
Although much of the Democratic plan would send money to traditional infrastructure priorities like highways, transit and waterways, Schumer highlighted less conventional spending priorities, including $40 billion to build high-speed Internet connections in rural areas and $80 billion to upgrade the country’s energy grid.
Republicans dismissed the Democratic proposal Wednesday. Aides said it was hypocritical for Democrats, after months of complaining about the $1.5 trillion deficit impact of the tax bill, to take two-thirds of that cost and devote it to infrastructure.
Senate Majority Leader Mitch McConnell (R-Ky.) scoffed at the proposal in floor remarks Wednesday.
“Repeal all these bonuses, pay raises, new jobs, and new investments? Talk about a nonstarter,” he said.
Before Trump’s election, Schumer and many other Democrats had previously endorsed infrastructure plans that would have raised funds by forcing American companies to move their overseas profits back to the United States and taxing them at a discounted rate. But Republicans used that maneuver, known as repatriation, to help offset the cost of their tax cuts.
That has left little choice, Schumer said, to finance a big infrastructure plan. Democratic leaders, like their Republican counterparts, have rejected one obvious alternative: raising the federal gasoline tax for the first time since 1993.
“We’d rather have the very wealthy and corporations pay for it than average folks who drive,” he said.