Senate Dems propose tax cut rollback to pay for infrastructure
Senate Democrats on Wednesday proposed undoing some of the tax cuts in the law President Trump 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 Schumer (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.
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 Wyden (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 Barrasso (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.