Democratic congressman says US should raise corporate tax rate to fund infrastructure
- Rep. John Delaney (D-MD) has proposed raising the corporate tax rate to 23% in order to raise $200 billion for infrastructure projects, according to CNBC.
- The GOP tax reform bill, passed at the end of last year, lowered the rate to 21%, but Delaney said the $200 billion, combined with money from the private sector, as well as from local and state governments, could provide as much as $1 trillion in infrastructure financing and create as many as 10 million jobs.
- As an alternative to raising the corporate tax rate, Delaney said closing the carried interest loophole for private equity and hedge fund managers could also pay the federal government's share of a "transformative infrastructure plan."
President Donald Trump, in his 2018 budget proposal, pegged $200 billion as the amount the federal government would have to contribute in order to spur $800 billion of additional investment, bringing the overall total to $1 trillion. However, the White House has not yet identified where they will find that $200 billion. Trump is supposed to reveal the details of his infrastructure plan this month, but, according to The Hill, the administration could push that back to February after the State of the Union address, which is scheduled for Jan. 30.
The administration recently floated the idea of an increase in the federal gas tax to beef up the Highway Trust Fund (HTF), which distributes money to the states for surface transportation projects, and to help pay for an infrastructure program. But Democrats, led by Senate Minority Leader Chuck Schumer (D-NY), wasted no time pushing back against the proposal. Schumer said a tax on working-class Americans was a no-go but added that he would favor using repatriated corporate earnings instead.
The current federal gas tax, which has not been raised since 1993, is 18.4 cents per gallon. The tax on diesel is 24.4 cents per gallon. According to the Congressional Budget Office, the HTF will be empty in the next 10 years if lawmakers do not identify new revenue streams or raise the gas tax.
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