Biden Defends Plans to Tax the Rich

“Ultimately, its political standing is measured by the health and well-being of the economy,” said Josh Holmes, political advisor to Senator Mitch McConnell of Kentucky, the Republican leader. “From a tax point of view, he speaks of suicide by the administration.”

In business today

Updated

May 5, 2021, 6:08 p.m. ET

But Mr. Holmes agreed that Mr. Biden would do a successful political calculation, at least in the short term. “He’s right that corporate tax increases aren’t unpopular,” said Holmes. But the political rationale for Republicans is that even in the midterm elections, politics will prove unpopular with American voters because of its impact on workers and the economy, he said.

Independent forecasters largely expect the economy to boom this year as the country reopens to economic activity due to Covid-19 vaccinations. The analyzes differ on how Mr Biden’s $ 4 trillion agenda could affect it. Penn Wharton Budget Model analysts predict the tax hikes would hurt overall growth. Wells Fargo forecasters wrote this week that Mr Biden’s infrastructure package, including the corporate tax increases that would fund it, would fuel growth for years to come.

The battle in Washington over Mr. Biden’s plans is a continuation of a battle that began under President Donald J. Trump, who signed a $ 1.5 trillion tax cut package in 2017. Democrats successfully portrayed the cuts as benefits to the rich, and they never reached the public popularity that Republican leaders envisioned. Republicans largely abandoned their plans to focus on the 2018 campaign tax cuts.

“There were far more Democratic ads than Republican ads,” said Geoff Garin, a Democratic pollster.

In many ways, these tax cuts have given Mr Biden an opportunity, Mr Garin said.

“When Biden talks about the corporate tax rate, he puts it in the context of withdrawing the 2017 corporate tax cut as opposed to a corporate tax hike out of the blue,” he said. “Polls suggest that support for the Biden proposal is even higher when you give the context of the 2017 corporate tax cut, which most voters believe is excessive and wasteful.”

White House officials also cite the 2017 law to explain their aggressive stance on the tax issue. “The pandemic has exposed huge inequalities in this country,” said Anita Dunn, a senior White House adviser. “Even before that, the 2017 tax cut was very unpopular.”

Comments are closed.