While the White House continues to seek compromise with Republicans on President Biden’s sweeping $2.3 trillion infrastructure and jobs plan, the Senate Finance Committee held a hearing Tuesday to discuss funding options for large-scale infrastructure improvements.
The White House continues to insist corporations should help pay for infrastructure with an increase to the corporate tax rate from 21% to 28% and increasing the global minimum tax rate on multinational corporations. Republicans have mostly balked at the size of Biden’s infrastructure proposal and almost uniformly object to raising the corporate tax rate as a pay-for.
This impasse was reinforced at Tuesday’s hearing, with Senate Finance Committee Chairman Ron Wyden (D-OR) saying in his opening statement that corporations have never contributed less to federal revenues than they do now under the 2017 tax law signed by President Trump.
“It’s long past time for mega-corporations to pay a fair share for building and repairing roads and bridges,” Wyden said. “They drive trucks across America’s roads and highways. They send products to market through the airports and waterways. They rely on our power grids and communication systems. They ought to pitch in for the infrastructure that makes America an economic superpower.”
Senate Finance Ranking Member Mike Crapo (R-ID) began his own opening statement by noting recent “productive” meetings between Republican lawmakers and President Biden, but quickly established raising corporate taxes as a non-negotiable. “Consideration of offsetting the cost of infrastructure with a corporate tax rate increase or increases in international taxes, especially coming out of the largest negative shock to the economy on record, is counterproductive and a non-starter on my side of the aisle,” Crapo said.
Crapo said infrastructure investments could be financed through user fees, including new charges on owners of electric vehicles. He added that Congress should consider proposals to attract private capital for infrastructure projects and look to repurpose unused federal funds. One potential financing offset that has attracted bipartisan support is resurrecting Build America Bonds, which are special municipal bonds that allow states and counties to float debt with interest costs subsidized by the federal government. Build America Bonds were introduced more than a decade ago as the Obama administration looked for ways to jumpstart the economy after the Great Recession.