McConnell said that raising corporate taxes would lead to job losses to overseas competitors with lower rates. He said “users” of the infrastructure should help pay for it. One example is the federal gas tax, which pays for road and bridge improvements and has not been increased since 1993. McConnell was not specific about what user fee increases Republicans could back.
“So how to pay for the infrastructure bill, on our side, is we’re not going to revisit the 2017 tax bill,” McConnell said. “We’re happy to look for traditional infrastructure pay-fors, which means the users participate.”
McConnell cited concerns about the federal debt, even though deficits grew substantially every year of Trump’s presidency, when the GOP was also in control of the Senate.
“I think it’s time to take a look at our national debt, which is now as large as our economy for the first time since World War II,” McConnell said.
Biden’s infrastructure proposal would lead to an eventual reduction of the debt if the tax hikes are fully enacted. He would raise the corporate tax rate from 21% to 28% to pay for it, reverting to what had been the corporate rate before the 2017 GOP tax cut was enacted.
The 2017 GOP tax bill, which all the Republicans voted for, slashed the corporate rate from 35% to 21%. It was supposed to usher in a new era of American investment and job creation, yet growth never came close to the promised levels.
The deficit came in at $587 billion for the fiscal year ending Sept. 30, 2016, then shot to $668 billion in Trump’s first year. It nearly hit $1 trillion in year 3 and jumped to $3.1 trillion in 2020, in large part because of the country’s response to the coronavirus pandemic.
This year, the deficit has continued its surge. Nancy Vanden Houten, senior economist at Oxford Economics, said she expects the deficit for this budget year will total $3.3 trillion, an all-time high and up 6.5% from last year’s record shortfall.
Federal debt levels hit nearly $27 trillion at the end of the latest fiscal year.
Democrats counter that Republican lawmakers didn’t seem as concerned about deficits when Trump was president.
House Speaker Nancy Pelosi said last week that investments in education “brings more money than anything back to the Treasury.”
“All of a sudden, they’re deficit hawks when they were giving away money to the wealthiest people in our country under President Trump,” Pelosi said in a CBS interview.
Freking reported from Washington.
Senate Minority Leader Mitch McConnell, R-Ky., leaves a meeting with fellow Republicans on Capitol Hill in Washington, Thursday, April 29, 2021, the day after President Joe Biden addressed Congress on his first 100 days in office. (AP Photo/J. Scott Applewhite)
Credit: J. Scott Applewhite
Credit: J. Scott Applewhite