Earlier this week Senate Democrats introduced a tax plan designed to show what Democrats can be expected to do should they win back majorities in Congress.
Their press release refers to their avoidance of “gimmicks and giveaways”; this appears to be a reference to the bonuses, pay raises, and private sector investment and job creation afforded by the new tax law. All of which, the Democrat proposal would roll back.
The Democrat’s plan calls for new taxes, rolling back the death tax, cutting off the “crumbs” that are making their way into Americans’ wallets, and $1 trillion in infrastructure spending, among other items.
Senate Democrats on Wednesday proposed repealing major pieces of the just-passed tax law, in a plan that would raise taxes on corporations, estates and high-income households to pay for $1 trillion in new infrastructure spending.
The plan will almost certainly go nowhere with Republicans in charge of Congress and the White House. But it provides a first clear signal about Democratic priorities on tax policy after the passage of the Tax Cuts and Jobs Act, and establishes a clear contrast for the 2018 midterm elections.
The proposal would set the corporate tax rate at 25%, up from today’s 21% but still well below the 35% that was in place until President Donald Trump signed the new tax law in December.
Democrats also propose to cut the estate tax exemption from $11.2 million per person back toward the $5.6 million in effect under the old tax law. They would set the top individual tax rate back at 39.6%, up from 37%, and they would expand the alternative minimum tax, a parallel tax system for top-earning households. The GOP law, which passed without a single Democratic vote, narrowed the AMT’s scope from millions of households, many in Democratic-leaning states such as New York and California, to a few hundred thousand.
You can read the Democrats’ full proposal here.
The president’s tax cuts are popular and gaining in popularity as more and more Americans see the benefits in their wallets and in the jobs market.
Even progressives are quietly “whispering” that “maybe Trump isn’t that bad after all” and are citing among his positive achievements the very tax plan Democrats are promising to destroy.
But during a recent, daily grumble about The Donald, I got thinking; if you look past the ridiculous Twitter pronouncements, and the President’s general veneer – what has he actually done? How bad has the 45th President of the United States actually been for the country?
The answer, it might surprise you, is not that bad at all.
Stock market up, unemployment down. After plateauing for much of 2015 and 2016, numbers of manufacturing jobs have been on the rise since Trump’s inauguration. While Trump has perhaps taken more credit than he’s due in these areas, it would be ignorant to deny him at least some – business confidence has steadily grown under Trump’s presidency, a direct effect of tax cuts; the most comprehensive simplification of the US tax code in 30 years; and a staunch refusal to regulate the economy to the same extent as during Obama’s tenure. Through 2016-2018, regulations have grown by only 0.6 per cent, in comparison to the 1.6 per cent per annum under Obama.
It’s not really clear why Democrats think this plan is a winner or why they believe it will create a “blue wave” they can ride to Congressional majorities.
This week, Congressional Democrats released a detailed tax hike plan that they promised to implement if given majority control of the House and Senate after the 2018 midterm elections. So much for the crocodile tears about the deficit–Democrats want to raise taxes not to reduce the debt, but rather to spend that tax hike money on boondoggle projects.
. . . . All of this is very confusing given that the new tax law is supported by a plurality of the American people (the New York Times reports it’s actually a majority) and is growing in popularity. A good chunk of people haven’t even yet realized they’ve received a tax cut, so the favorable numbers should continue to grow.
. . . . Instead of figuring out how to raise taxes, Congressional Democrats would do better to work in a bipartisan manner to make the middle class and pro-jobs tax relief just passed into law permanent.
This is sound advice . . . that Democrats clearly have no intention of taking. Instead, Senate Minority Leader Chuck Schumer (D-NY) is hailing the Democrat plan as “the major thing they will talk about” leading into the midterms.
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.”
In the wake of Trump’s tax law, Democrats found themselves in the ideologically awkward (hypocritical?) position of protecting the top 1% from payer higher taxes, so it’s little wonder that they want much of the new tax law jettisoned.
Their proposal, of course, will go nowhere while Republicans hold majorities in the Senate.
Senate Majority Leader Mitch McConnell (R., Ky.) declared the Democrats’ plan dead.
“Repeal all these bonuses, pay raises, new jobs, and new investments? Talk about a nonstarter,” he said on the Senate floor Wednesday.
The White House also dismissed the Democrats’ plan.
“Only tone-deaf Democrats could think the proper response to the booming Trump economy, higher wages and hard-working Americans keeping more of their own money is to reverse the policies that got us here,” deputy White House press secretary Lindsay Walters said in a statement.
While Democrats desperately try to hide that they are indeed proposing the repeal of “all these bonuses, pay raises, new jobs, and new investments,” the GOP would do well to aggressively pull back the curtain and reveal what Americans can expect should Democrats regain control of Congress.
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