Senate Dems propose tax cut rollback to pay for infrastructure

Senate Dems propose tax cut rollback to pay for infrastructure
© Greg Nash

Senate Democrats on Wednesday proposed undoing some of the tax cuts in the law President TrumpDonald John TrumpKimberly Guilfoyle reports being asymptomatic and 'feeling really pretty good' after COVID-19 diagnosis Biden says he will rejoin WHO on his first day in office Lincoln Project offers list of GOP senators who 'protect' Trump in new ad MORE signed in December in order to pay for a $1 trillion infrastructure plan.

“Rather than cutting existing infrastructure projects to pay for a paltry program, we want to roll back the Republican tax giveaways to big corporations and the wealthy and invest that money instead in job-creating infrastructure,” Senate Minority Leader Charles SchumerChuck SchumerA renewed emphasis on research and development funding is needed from the government Data shows seven Senate Democrats have majority non-white staffs Trump may be DACA participants' best hope, but will Democrats play ball? MORE (D-N.Y.) said at a news conference.

Democrats have been talking in recent weeks about their desire to repeal parts of the new tax law that benefit wealthy individuals and corporations if they take back control of Congress. The plan announced Wednesday provides details about what changes Democrats would make to the law.


Senate Democrats are proposing reinstating a top individual tax rate of 39.6 percent, which was lowered to 37 percent under the new law. They also say they want to increase the corporate tax rate from 21 percent under the new law to 25 percent. The corporate tax rate under the old code was 35 percent.

They are also proposing to restore the individual alternative minimum tax and the estate tax to 2017 rules. The exemption amounts for both taxes were increased under the new law. And they plan to close the carried interest “loophole” that benefits investment-fund managers. The tax law placed new limits on the tax break but did not eliminate it entirely.

“Only tone-deaf Democrats could think the proper response to the booming Trump economy, higher wages and hardworking Americans keeping more of their own money is to reverse the policies that got us here," White House deputy press secretary Lindsay Walters said in a statement Wednesday in response to the Democratic announcement.
"President Trump is growing the economy for all Americans so that we can continue to deliver lowers taxes AND 21st century infrastructure, because that’s what the people deserve," she added.
Senate Democrats plan to use the revenue raised by rolling back the tax cuts to pay for infrastructure. Their plan proposes spending $140 billion to ensure that the highway trust fund is solvent, $140 billion on roads and bridges and $40 billion on high-speed internet.

Trump released an infrastructure plan in February that relies on state and local governments and the private sector to make most of the new investments. But Democrats have blasted that plan, arguing that significant federal funds are needed and that Trump’s plan would lead to a proliferation of toll roads.

“Our plan would do three things compared to the president. First, create many more jobs than the Trump plan. Second, build many more projects than the Trump plan, and third, build the infrastructure America actually needs,” Schumer said.

Senate Democrats said they will promote their plan as they campaign ahead of this year's midterm elections.

“This will be a major thing we will talk about,” Schumer said. “And the contrast between tax cuts for the wealthiest people as opposed to middle-class jobs is one we will forcefully advocate in the fall.”

Sen. Ron WydenRonald (Ron) Lee WydenCongress must act now to fix a Social Security COVID-19 glitch and expand, not cut, benefits On The Money: Trump administration releases PPP loan data | Congress gears up for battle over expiring unemployment benefits | McConnell opens door to direct payments in next coronavirus bill Hillicon Valley: QAnon scores wins, creating GOP problem | Supreme Court upholds regulation banning robocalls to cellphones | Foreign hackers take aim at homebound Americans | Uber acquires Postmates MORE (Ore.), the top Democrat on the Senate Finance Committee, said that Democrats will also highlight “all the efforts we made to be bipartisan” and the missed opportunities for Democrats and Republicans to work together, such as on using tax revenue from the repatriation of foreign earnings to pay for infrastructure.

Senate Environment and Public Works Committee Chairman John BarrassoJohn Anthony BarrassoCourt upholds protections for Yellowstone grizzly bears OVERNIGHT ENERGY: Trump nominates controversial, longtime acting head of BLM as director | Ernst sinks vote on Trump EPA nominee | Massive dust storm from Africa hits Texas, Louisiana Ernst sinks vote on Trump EPA nominee MORE (R-Wyo.) said the Democrats' proposal is "about raising taxes."

“The Democrats’ plan is clearly about raising taxes on American families not upgrading our roads, bridges, and water systems. We need a robust and fiscally responsible infrastructure plan that will help, not hurt, America’s economic growth,” Barrasso said.

Infrastructure and environmental groups spoke favorably about the Democrats’ plan.

“We appreciate the Senate Democrats’ proposal to fund transportation and other infrastructure needs,” said Marcia Hale, president of Building America’s Future. “Senate Democrats believe, as we do, that legislation must include robust federal funding to rebuild our American infrastructure.”

But the plan was blasted by the RATE Coalition, a group of companies that pushed for a lower corporate tax rate during the tax-reform debate.

"Unfortunately, the proposal released today by Senate Democrats would raise the tax rate responsible for putting more money in the pockets of over four million Americans,” the group said.

Updated at 1:04 p.m.