facebook linkedin twitter

Democrats Say Corporate Tax Rate Favors the Rich, Overlooks the Poor

February 12, 2020 by Tom Ramstack

WASHINGTON – Congressional Democrats assailed the Trump administration’s 2017 corporate tax cut during a hearing Tuesday.

They said the drop from 35 percent to 21 percent is adding to the national deficit while leaving less tax revenue for programs to help the underprivileged.

The House Ways and Means Committee held the hearing on the same day the Trump administration released its $4.8 trillion budget for fiscal 2021. It proposes further cuts to domestic spending and additional tax cuts.

Democrats are calling it dead on arrival, particularly in an election year when the president’s opposing candidates are criticizing what they say is his favoritism toward corporations and the wealthy.

Pete Buttigieg, Bernie Sanders and Elizabeth Warren all want a return to the 35 percent rate. Joe Biden says it should be 28 percent.

Similar criticism continued during the congressional hearing.

Rep. Richard Neal, chairman of the Ways and Means Committee, said, “The benefits clearly went to people at the very top” income levels.

He called the tax cut “irresponsible” and said it was “giving many corporations a windfall.”

President Trump said when he proposed the tax cut that the benefits for corporations would create new jobs and increase wages for even lower-income workers. He said it could result in as much as $4,000 in extra annual income for many households.

“Workers continue to wait for what they were promised,” said Neal, a Massachusetts Democrat.

Trump also suggested the tax cuts would pay for themselves through new economic activity.

Neal disagreed, saying, “Nor did it raise families’ incomes by $4,000 nor did it pay for itself.”

Republicans accused Democrats of exaggerating any problems from the corporate tax cut.

Rep. Kevin Brady of Texas, the ranking Republican on the Ways and Means Committee, said, “We redesigned the code so that our businesses could compete anywhere in the world.”

Corporations’ new economic activity means they are earning more money, thereby paying more taxes, according to the Republicans.

“Corporate taxes aren’t disappearing, they’re growing,” Beal said.

In some cases, the benefits exceeded expectations, he said.

“Job growth is 3.2 million greater than expected,” he said.

The dispute continued among witnesses at the congressional hearing.

Jason Furman, a Harvard University economics professor and former chair of the Council of Economic Advisers during the Obama administration, said U.S. corporate tax revenue as a percentage of gross domestic product is lower than any of 30 developed countries, except for Latvia.

Any corporate tax revenue growth predicted in the coming years will disappear long-term if the 2017 corporate tax cut becomes permanent, Furman said.

However, former Congressional Budget Office director Douglas Holtz-Eakin said the tax cut has largely halted the trend of corporations to relocate their headquarters overseas to avoid the previous 35 percent U.S. corporate tax.

Before the tax cut, corporate tax collections already were falling because of declining profits for the companies, Holtz-Eakin said. Now, other countries are lowering their corporate taxes to stay competitive with the United States.

“It got us in the middle of the pack and the pack’s still heading south,” he said.

In The News

Health

Voting

Congress

August 2, 2021
by Dan McCue
Select Committee Works to Make Congress Better for Staff, Members and the American People

Retaining staff on Capitol Hill has never been easy, but it’s likely never been harder than it is today against... Read More

Retaining staff on Capitol Hill has never been easy, but it’s likely never been harder than it is today against a backdrop of often divisive and toxic politics, the spiralling costs of living in the region, and in the wake of the worst siege of the... Read More

August 2, 2021
by Tom Ramstack
Rush is on to Extend Eviction Moratorium While Landlords and Republicans Oppose It

WASHINGTON -- The Biden administration announced Monday that it is trying to find a way to extend the federal eviction... Read More

WASHINGTON -- The Biden administration announced Monday that it is trying to find a way to extend the federal eviction moratorium that expired Saturday. As many as 11 million Americans are in danger of losing their homes within weeks after expiration of the ban on evictions... Read More

August 2, 2021
by Dan McCue
Legislators Descend on DC to Pressure Senate to Pass Voting Rights Bill

WASHINGTON -- Legislators from across the country began arriving in Washington, D.C., on Monday in a bid to pressure the... Read More

WASHINGTON -- Legislators from across the country began arriving in Washington, D.C., on Monday in a bid to pressure the U.S. Senate to pass sweeping voting rights legislation known as the For The People Act. The House passed the bill in March by a 220-210 vote... Read More

August 2, 2021
by TWN Staff
Senators Finalize Bipartisan Infrastructure Bill Text

Senators on Sunday night finalized the text of the bipartisan infrastructure bill, creating a sweeping 2,702-page document that could be... Read More

Senators on Sunday night finalized the text of the bipartisan infrastructure bill, creating a sweeping 2,702-page document that could be voted on in the chamber by the end of the week. “We want to be done by Thursday,” Sen. Joe Manchin, D-W.Va., said on CBS’s "Face... Read More

Pelosi, Democrats Call on Biden to Extend Eviction Ban

WASHINGTON (AP) — House Speaker Nancy Pelosi and the House Democratic leaders called on the Biden administration to immediately extend... Read More

WASHINGTON (AP) — House Speaker Nancy Pelosi and the House Democratic leaders called on the Biden administration to immediately extend the nation's eviction moratorium, calling it a "moral imperative" to prevent Americans from being put out of their homes during a COVID-19 surge. An estimated 3.6... Read More

July 30, 2021
by Dan McCue
Treasury Dept. Must Turn Trump’s Tax Returns Over to Congress

WASHINGTON -- The Treasury Department must provide the House Ways and Means Committee with former President Donald Trump’s tax returns,... Read More

WASHINGTON -- The Treasury Department must provide the House Ways and Means Committee with former President Donald Trump’s tax returns, the Justice Department said in a legal opinion released Friday. In the opinion, the Justice Department’s Office of Legal Counsel said the committee chairman “has invoked... Read More

News From The Well
scroll top