Why Joe Biden Should Listen to Bernie Sanders on Corporate Taxes [View all]

[JoeOtterbein]

Washington Monthly

The Vermont Senator’s plan would close the pay gap between workers and executives—and be immensely popular.

by Carter Dougherty

In April, President Joe Biden proposed raising the federal corporate tax rate from 21 to 28 percent to help pay for his $2.3 trillion infrastructure program. That increase would only partially reverse Donald Trump’s 2017 epic slashing of corporate taxes from 35 to 21 percent, a policy most economists consider a flopin its intended effect of boosting business investment and economic growth. Yet limited as it is, Biden’s corporate tax hike is not getting enough love in Washington.

Senate Republicans who have expressed some interest in a bipartisan infrastructure bill have also said raising corporate taxes is a deal killer. Their votes might not be needed if Democrats decide to pass the infrastructure legislation through the congressional reconciliation process. But Democratic moderates like Joe Manchin are balking too, saying they’d only be comfortable raising the corporate tax rate modestly, to 25 percent.

At a time when average Americans are profoundly concerned about stagnant wages and strongly favor raising corporate taxes to pay for infrastructure—Democrats by 85 percent, independents by 60 percent, according to a recent Morning Consult poll—it’s more than a little dispiriting that Biden’s proposal isn’t getting more traction in Congress. What he needs is a smarter corporate tax plan, one that would be harder for the likes of Manchin, and maybe even some populist-leaning Republicans, to resist.

Fortunately, there is one—proposed by, of all people, Senator Bernie Sanders. But to grasp its advantages, you first have to understand why Biden’s plan is floundering.

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Indexing corporate taxes to top Executives pay, is fair to us workers, and would pay us Dems big-time in political support.