Senate Republicans, with an assist from Democrat Joe Manchin, are doing their level best to insist that it would destroy the economy to repeal the 2017 Trump tax scam, and that spending now on keeping all of the systems for the whole goddamned nation from crumbling in to the ground in the next decade is dangerously radical and expensive. On both fronts, they're full of crap. And people who are much better at doing that economics stuff than me say so.
Manchin, the self-appointed king of the Senate, has been proclaiming lots of stuff about how the Senate should work lately, much of it ill-informed and all of it delusional. Like the assertion that there are 10 Republicans who would love to pass President Joe Biden's priorities if President Joe Biden was just a little be nicer to them. And let them keep all their tax cuts.
Or maybe Manchin is projecting, because Manchin wants to keep that tax cut. His proclamation at the beginning of Biden's first infrastructure week was that raising the corporate tax rate from 21% to 28% is just not going to work for him, but 25% might, and "If I don't vote to get on it, it's not going anywhere." Not that he is relishing this moment in the sun or anything.
Remarkably, Manchin doesn't go into details about why he's opposed to that tax hike. That makes him marginally better than Republicans who are, as Greg Sargent writes, scamming their voters again. They're reaching deep into their bag of old lies and pulling out the old "small-business job creators." Raising the corporate tax rate and making it harder for multinational corporations to set up tax shields overseas will harm those "small business job creators," Republican Sen. Roger Wicker of Mississippi said twice on Sunday's This Week.
Wicker said the plan is "a massive social welfare spending program combined with a massive tax increase on small business job creators." He continued "I can't think of a worse tax to put on the American people than—than to raise taxes on small business job creators which is what this bill would do." Except that none of the businesses subject to the corporate tax hike—or the limits on off-shoring accounts for tax shelters—are small.
Steven Rosenthal, a senior fellow at the nonpartisan Tax Policy Center, tells Sargent that "By definition, raising the corporate tax rate and creating a more robust minimum tax for foreign profits would not reach small businesses." By that he means that the regular, normal actually small business is unlikely to have a corporate structure that makes them liable for corporate taxes. As for limiting the amount corporations can shield by international profit sharing? "How could a small business ever have foreign profits from abroad?" Rosenthal asked. That's a very good question.
This is the line in the sand for Republicans. Keeping corporate tax rates low. "I view the 2017 tax bill as one of my signature achievements in my entire career," Wicker did not pay for itself as promised, it also failed to create jobs. "Instead companies put much of the money toward stock buybacks rather than investments," PBS News reported in 2019. "Buybacks hit a record $1 trillion in 2018, a nearly 50 percent increase from the year before."
In a wonky column at The New York Times, Paul Krugman talks about the repeal of that "flop" of a tax cut, that "failed […] completely to deliver the promised surge in business investment." As in creating jobs. Which it did not do. Krugman cites a 2019 analysis from the International Monetary Fund, that concluded those tax cuts "ended up having no visible effect at all on business investment, which rose no more than you would have expected given the growth in demand."
This opposition from Republicans—and Manchin—to making big multinational corporations pay more in taxes is not about jobs. It's about protecting shareholders, as usual. Now what will create jobs is an ambitious infrastructure plan creating works projects in every state in the country, like Biden's. Moody's has estimated it will result in about 2.7 million new jobs directly, and that it would "result in substantially more jobs [by] mid-decade" and that unemployment is "meaningfully lower" with the plan.
That's what's at stake here. Actual real jobs rebuilding the country, as opposed to the mythical ones corporations are not going to create if they don't have to pay taxes. The Republican line in the sand is bullshit. Manchin reinforcing it as his excuse to oppose this bill is even worse.
Published with permission of Daily Kos