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Senate Republicans railed against President Biden’s corporate tax hike pitch Tuesday, arguing that the burden for the president’s proposal to help pay for his $7.3 trillion budget would be shouldered by middle-class Americans instead.
Republicans at the Senate Budget Committee hearing told Office of Management and Budget Director Shalanda Young that Mr. Biden’s budget was disingenuous in its proposed tax hikes, and that the increased taxes geared toward wealthier Americans and corporations would actually be mostly paid for by people making less than $400,000 a year.
Mr. Biden said last week his sweeping budget proposal would rely on making the wealthy “pay their fair share,” including a hike in the marginal corporate income tax rate to 28%. Ms. Young testified that, under the president’s budget, no one earning below $400,000 would “pay a penny more” as part of the new tax hike proposals.
Iowa Sen. Charles E. Grassley, the ranking Republican on the Senate panel, noted that under the current budget, people making below $400,000 a year already bear about 37% of the corporate tax burden. The corporate tax hikes could increase that to almost half, he said.
“I think you keep forgetting that corporations are nothing more than a sheet of paper. They’re management, employees and they’re customers,” Mr. Grassley said. “Everything that corporations pay they pass onto somebody else.”
“If the assumption is that corporations will pass on any tax increases the president has asked for hard-working Americans, that’s something that we should all be worried about,” Ms. Young said.
Mr. Biden’s budget also raises new revenues through a new minimum 25% tax on unrealized income of the wealthiest households.
Sen. Mitt Romney, Utah Republican, railed against the idea, arguing that no other country in the world — save for a brief, failed experiment in France — imposes taxes on assets and financial gains that have yet to be realized.
“I think it’s the stupidest idea I’ve ever heard, it would devastate our economy,” Mr. Romney said.
Mr. Biden’s budget proposal would also raise the minimum tax rate on billion-dollar corporations from 15% to 21% and increase taxes on U.S. corporations’ foreign income from 10.5% to 21%, while eliminating tax reductions for executive compensation.
In all, the White House projects that the tax hikes and other proposed cost-saving mechanisms such reducing prescription drug prices for Medicare, would see the government collecting about $5.5 trillion in revenue while leaving about a $1.8 trillion deficit this year.
Mr. Biden’s budget projected that Congress would keep deficits steady over the next decade at about $1.5 trillion per year while spending roughly $10 trillion annually during that time frame.
Republicans argued that the budget is misleading in its promise to cut into the deficit, contending the White House plan adds trillions of dollars in national debt over the next decade. But Sen. Debbie Stabenow, Michigan Democrat, countered that GOP lawmakers didn’t seem to care about the rising deficits under former President Donald Trump.
“We all know that the $2 trillion in unpaid for tax cuts to the wealthiest Americans done under President Trump put us in a situation where 25% of all of the national debt in the country, ever, ever, ever created was in those four years, and I didn’t hear a lot [about the deficit] then,” Ms. Stabenow said.
• Alex Miller can be reached at amiller@washingtontimes.com.
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