The Republican Party is a major obstacle to Biden’s financial aspirations

The Republican Party is a major obstacle to Biden's financial aspirations
Senate Republicans who vehemently oppose any tax hike could have derailed Joe Biden’s infrastructure plan and the international minimum tax plan, discussed at the G7 this weekend.

Pay taxes to the rich, put an end to tax havens … Domestically and internationally, Joe Biden has put ambitious tax reforms on the table to fund his mega investment project in infrastructure. But he faces a major hurdle: the Republican Party. The Grand Ordinance Party’s (GOP) almost systematic ban on minorities in Congress could curb or completely curb the Keynesian aspirations of the US president. The effect of financial conservatism has been deeply rooted in the electorate since the 1970s.

Prohibition Tricks

The ball at Biden’s feet is still the Senate, which is held by a small majority by his camp. Democrats and Republicans equally divided the top 100 seats. With 50-50 votes, only the voice of Vice President Kamala Harris can make a difference. But the Republicans have a big trump card: the tactics of the ban Stumbling blocks, Progressive Democrats dream of abolition because almost all bills require a majority of 60 votes to pass.

It is sufficient to give the GOP its opinion in discussions about the infrastructure plan and to impose its own red lines. Starting with the tax increase, Republicans are strongly opposed. “This is not good for the country”, One of the leaders of the minority in the congregation was attacked in late April, Steve Scholis, Setting the tone for discussions. “If there is a plan […] To improve our infrastructure without raising taxes, I am very open ”, He added.

READ  Science. We now know how the animals crossed the sea from South America to the West Indies

Tough negotiations

Republicans have not given up since then. Following the failure of initial negotiations between the White House and some Republican senators, a group of ten senators (five Democrats and five Republicans) announced that they had reached an agreement on a plan “Realistic” About tr 1.2 trillion in infrastructure investments. “This investment will be paid in full and will not include a tax increase”, The bipartisan committee explained that its deal could not satisfy the White House.

This is because, in addition to the higher ambition (approximately $ 3.2 trillion in investments), the White House initial plan should be financed by raising corporate taxes from 21% to 28% (increased from 35% to 21% from under Trump), in addition to debt, income tax and finance Income taxation increased. Finally, the only tax provided in the senators’ agreement is the index for the petrol tax inflation. This applies to everyone, except the search for improving the tax progress that drives the Biden administration. The candidate, the former vice president, promised that any tax increase would not target taxpayers earning less than $ 400,000 a year.

Ideological siege

This taxation, which is rooted in Republican ideology, dates back to the 1970s. “In the 1980s, the GOP succeeded in reducing taxes and imposing this ideology on society and the Democrats. […] Who refuses to increase them ”, Ecole des Hots educates observes Romain Hourett, research director at My Sciences Socioles. For Ronald Reagan, he was very impressed by the celebrities “High taxes kill taxes” Progressive tax seizure from economist Arthur Lafarge. Between 1981 and 1986, the margin tax rate for the rich went from 70 to 28%.

READ  What it's like for publisher Mark Schoofs to take over BuzzFeed News during a global pandemic

Reagan “Raises old passive tradition”, Romain Hourett adds. “Until the end of the 1920s, Republicans hated the largest tax increase in the United States, financial citizenship or the collective production of wealth. All that changed with the crisis of 1929 and the victory of Keynesianism.” Donald Trump will continue Reagan’s work in 2017 with his “tax cuts and work plan” that introduced public tax cuts. Despite the emergence of a debate – increasingly documented by economists – the Republican ideological blockade continues on the consequences of the apparent iniquity of the US tax system and the widening social inequalities.

A “delusion” minimum rate

In order to fund his mega project, Joe Biden is also calculating rising profits at the tax havens of large corporations. The US President hopes to monetize multinational corporations with a global agreement on a minimum tax rate. But again, Republican financial conservatism may rain down the president’s aspirations. If the G7 finance ministers agree on June 5 on the basis of a policy of at least 15%, the reform will still have to be verified by the 138 countries that make up the “inclusive framework” of the G20 and the OECD. If the future international conference requires changes to the tax treaties, it will require a two-thirds majority in the Senate to approve it, which seems almost impossible for Joe Biden.

The White House has already cut its aspirations, going from the 21% proposed by Treasury Secretary Janet Yellen in early April to 15% in early June, after tough discussions with the GOP. 21% rate “There was a political scenario behind the talks with the US Congress”, Explained in early June Release Pascal Saint-Amans of the OECD. But can the Republican camp accept 15% more? Nothing is less certain. Joe Biden will discuss the issue with his G7 colleagues at the summit in Cornwall until Sunday, when Republican-elected officials have already raised alarm.

READ  "Joe Biden and the Reconstruction of America"

In A letter to Janet Yellen In late May, Senator Mike Grobo, who sits on the Senate Finance Committee, warned the United States “I do not want to accept an agreement that will continue to target American companies.” His colleague Pat Doomie from Pennsylvania even called this minimum rate “Delusion”, Judgment “Necessary” Let the plan be “Blocked”. Yahoo asked for funding, Kevin Hazette, former economic adviser to Donald Trump, pointed to this global agreement “Will not happen” Also note that it is not in the interests of Americans Defender.

You May Also Like

Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

Leave a Reply

Your email address will not be published. Required fields are marked *