Politically and morally, this is unsustainable. As Sen. Ron Wyden (D-Ore.), the chairman of the Senate Finance Committee, said to the New York Times in explaining the rationale behind proposed tax increases for the wealthy: “What we’re doing is generating revenue, but we are also making a major area of American government more fair, so people don’t feel they’ve been played while the rich person gets off scot-free.”
On the corporate tax side, voters have every reason to be outraged that 55 major corporations paid no federal taxes last year. Dozens of others have reaped massive profits without making good on their promises to increase employment, wages and investment. Corporations are contributing a smaller share of federal revenue while collecting trillions in bailouts and deriving untold benefits of taxpayer-funded infrastructure, a public-educated workforce and protection from corporate and cyber crimes. Even more galling, corporations have learned to manipulate finances so as to substantially reduce their tax burden on overseas income.
Likewise, ProPublica’s jaw-dropping exposé illustrated the extent to which the wealthy have gotten wealthier while paying an effective tax rate far lower than the average American. The Times reports that Democrats see this moment as an opportunity: “The ProPublica report added fodder. But even before the pandemic recession, corporate tax receipts had plunged 40 percent after the Trump tax cuts. Though the 2017 tax law ostensibly lowered the corporate income tax rate to 21 percent from 35 percent, the effective business rate has fallen to 8 percent, said Representative Lloyd Doggett of Texas, a senior Democrat on the Ways and Means Committee.”
Meanwhile, Republicans have given up the pretense that they are willing and able to cut spending. Economists of all ideological stripes warn we cannot increase our debt indefinitely.
But this is not simply a matter of depriving the Treasury of revenue to perform the ever-growing list of services voters say they want. Part of the promise of democracy is shared prosperity and shared contribution. Grotesque post-tax income inequality — the result of excessive political clout combined with vast accumulation of wealth — calls into question the legitimacy of democratic governments. Whether one favors Justice Oliver Wendell Holmes’s adage that “taxes are the price we pay for civilized society” or Wyden’s assessment that “everybody ought to pay their fair share,” Democrats have the moral and political high ground when they insist that the richest corporations and individuals are the last ones who deserve a free ride.
Efforts to achieve tax reform and reduce income inequality are not dependent on the American Jobs Plan. The president has a robust American Families Plan, which might include items not included in the infrastructure bill. The discussion of spending priorities and of the tax code’s fairness therefore will continue.
Moreover, as the parties fight during the 2022 election cycle over which is the true friend of working people, Democrats will be all too happy to remind voters that Republicans not only oppose making corporations pay something but oppose enforcement of existing tax obligations. Democrats will be eager to paint the GOP as the party of the rich — and of the worst tax scofflaws. Republicans appear oddly willing to claim that distinction.
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Apart from funding infrastructure, the rich should pay more taxes - The Washington Post
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