Senate Democrats outlined a plan on March 7 to rollback GOP tax cuts and benefits enacted under the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97). The income would finance a $1 trillion infrastructure proposal. “We want to roll back the Republican tax giveaways to big corporations and the wealthy and invest that money instead in job-creating infrastructure,” Senate Minority Leader Charles E. Schumer, D-N.Y., said on March 7.
Rollback GOP Tax Cuts
The infrastructure plan unveiled by Senate Democrats would restore the top individual income tax rate to 39.6 percent. This rate was lowered to 37 percent under the TCJA. In addition, the plan would increate the corporate tax rate from the newly enacted 21 percent up to 25 percent. Further, Senate Democrats propose reversing cuts to the estate tax and restoring the individual alternative minimum tax (AMT).
However, the talk on Capitol Hill is that the Senate Democratic proposal will not go anywhere with a Republican majority Congress. Republicans have been touting the early success of the new tax law, pointing to hundreds of businesses’ announcements of new jobs, bonuses, and wage increases.
“Repeal all of these bonuses, pay raises, new jobs, and new investments – talk about a nonstarter,” Senate Majority Leader Mitch McConnell, R-Ky., said on the Senate floor on March 7. Although McConnell expressed disapproval of the Senate Democratic infrastructure plan, he stated last month that infrastructure has historically been an area of bipartisan cooperation. While both parties seem to agree on the importance of addressing infrastructure priorities, they do not, at this time, see eye-to-eye on how best to accomplish that goal.
President Trump released his own infrastructure proposal last month. Under the $1.5 trillion-investment generating infrastructure proposal, the federal government would spend $200 billion. However, the rest would be financed by state and local government contributions. Accordingly, Democrats have criticized Trump’s proposal for not offering enough federal government funding.