Biden and McConnell toughen their positions on tax hikes
WASHINGTON – President Joe Biden and Republican Senate minority leaders Mitch McConnell on Monday tightened their positions on the millionaire and corporate tax hikes Biden proposed to fund his extensive infrastructure and education plans.
“We’re open to a roughly $ 600 billion package that addresses what we all classify as” infrastructure, “” McConnell said at an event in Kentucky. “And talk about how to pay for that other than by reopening the 2017 Tax Reform Act.”
The increase in the corporate tax rate from 21% to 28% is the linchpin of Biden’s proposal to pay for the American employment plan, a massive overhaul of the country’s infrastructure and energy sectors that would create jobs after the coronavirus pandemic.
But McConnell described the 2017 tax cuts on Monday as one of the most significant domestic achievements of the past four years under former President Donald Trump. “We’re not going to do that again,” he said.
McConnell’s insistence on protecting the 2017 tax cuts is effectively pouring cold water on the best chance the White House and Congressional Republicans had to reach an agreement on at least part of Biden’s broader domestic agenda.
“I don’t think there will be any Republican support, none, zero for the $ 4.1 trillion grab bag that contains infrastructure, but a whole bunch of other things,” McConnell said.
Senate Minority Chairman Mitch McConnell (R-KY) arrives to address Republican caucus politics after lunch on Capitol Hill in Washington on April 13, 2021.
Joshua Roberts | Reuters
But not only McConnell drew a line in the sand on Monday.
Biden also did so during a visit to a community college in Norfolk, Virginia, where he announced the proposed expansion of scholarships to kindergarten and community colleges that were part of his American family plan to expand the social safety net.
This $ 1.8 trillion plan would be paid for in large part through changes in individual tax laws, including higher income tax rates for the very rich and stricter enforcement by the IRS.
“I’m from the corporate capital of the world,” said Biden, who is from the Delaware incorporation center. “I’m not against companies, but it is time they paid their fair share,” he said. “It’s about making a choice.”
“I don’t want to punish anyone, but everyone should get involved, everyone should pay something here on the street. The choice depends on who the economy serves, so I plan to give workers tax breaks and make everyone pay their fair share “said the President.
In addition to returning to pre-2017 income tax rates for the highest earners, Biden suggests expanding the IRS’s ability to review individual income, tax capital gains after death, and raise the capital gains tax rate to nearly 40% individual income tax rate.
On Monday, Biden, being careful not to personally vilify the very rich, said, “They are good people, they are not bad people.”
But the president also made it clear that he views these tax hikes as more than just a necessary evil to fund his grand plans: they are an integral part of restoring a sense of shared responsibility and burden across the American economy.
“For too long we’ve had an economy that gives every break in the world to the people who need them least,” he said. “It’s time to grow the economy from the bottom up and from the center out.”
Despite McConnell’s tough line, White House officials plan to spend extra time this week lobbying key Republicans in Congress to help overhaul the infrastructure.
Biden also plans to see McConnell, House Minority Leader, Kevin McCarthy, House Majority Leader Nancy Pelosi, and Senate Majority Leader Chuck Schumer, at the White House on May 12 for a wider discussion of common priorities.
But the Democrats in and around the White House recognize that Biden has a tight window of opportunity to get most of his national agenda through, and they are cautious about spending too much time soliciting Republicans for votes that may be never come about.
Veteran Democratic political strategists in Biden’s orbit also vividly recall former President Barack Obama’s extensive contact with Republicans in 2009 in support of the Affordable Care Act. Despite months of efforts, Obama’s signature legislation ultimately failed to win GOP votes.
According to Senator Chris Coons, D-Del., A close ally of Biden, there is an unofficial deadline of May 31 for the White House and Congressional Republicans to reach consensus, if at all.
“I think President Biden is open to spending the next month negotiating the opportunity,” Coons said in an interview with Punchbowl News last month.
If a deal wasn’t negotiated by Memorial Day, Coons said, “I think Democrats just roll it up into a big package and move it around.”