Surely Republicans will be scrambling all over themselves to support this goal, right?
Judging by the latest remarks from Senate Minority Leader Mitch McConnell (R-Ky.) and other Republicans, they should. But they will likely oppose these changes or anything that might accomplish the same end.
Which will reveal the GOP threats against corporations as largely toothless — exactly as they’re intended to be.
McConnell made big news by declaring that corporations defending voting rights are “behaving like a woke parallel government,” adding that they “will invite serious consequences if they become a vehicle for far-left mobs.”
What are these “consequences”? A McConnell spokesman won’t say. But other Republicans have threatened specific actions. Georgia legislators tried to kill a tax break for Delta Air Lines to punish the company for correctly pointing out that their new voting law will make it harder to vote.
Meanwhile, congressional Republicans have threatened to target Major League Baseball’s federal antitrust exemption, after MLB pulled the All-Star Game from Atlanta to protest the voting law.
What’s crucial here is that Republicans claim they want to eliminate special privileges that corporations enjoy. This is supposed to lend these moves an aura of being in the public interest, as opposed to a naked threat to use legislative power to chill criticism of GOP voter suppression.
But if Republicans are looking for special privileges to target, some of the biggest of all are the perks that multinational corporations currently use to game the tax system.
The new Democratic plan
The Democratic proposal — championed by Sen. Ron Wyden of Oregon, the Finance Committee chair — would target those privileges. It would fix problems that have arisen due to the tax cuts Republicans passed in 2017, which lavished most benefits on the wealthy and corporations.
That tax law was supposed to discourage multinationals from shifting income to overseas subsidiaries to minimize taxes. The law did this in part by imposing a new minimum tax on certain types of income earned abroad.
But this has proved insufficient. To oversimplify, tax experts say this provision exempts some income earned abroad, sets the rate on it too low and structures the tax in a way that allows for still more gamesmanship, encouraging companies to keep shifting profits abroad. A recent Joint Committee on Taxation report found the 2017 law was having minimal impact on this practice.
Democrats would fix this by increasing the rate of that tax and tightening its application to remove those incentives. This is part of a larger suite of policies from President Biden and Democrats to raise corporate taxes and haul in more revenue amid dire public need.
That revenue would help fund the enormous public expenditures needed to rescue the economy from the covid-19 collapse and invest in a massive new jobs and infrastructure plan to secure our economic future.
The important point here is that Republicans themselves say they want to discourage multinationals from sheltering profits from taxation offshore. This is exactly why they put the (insufficient) provisions in the 2017 tax bill.
Now that those provisions are not working as planned, you’d think Republicans would support such changes, or at least enter into a real debate over how to accomplish bringing back more revenues.
Meanwhile, the Biden administration is also proposing a new “global minimum tax” to prevent a race to the bottom in which countries entice multinational business with the lure of ever-lower taxation.
This would pose implementation challenges. But as Ryan Cooper notes, it would be a revolutionary response to a serious global problem that is starving countries of revenues to tackle major public problems.
Republicans are already opposing this, too. And they have ruled out raising the corporate tax rate, even though Biden is proposing to raise it only partway back toward where it was before Republicans slashed it.
The GOP’s fake ‘populist’ turn
The point here is not that Republicans should support targeting offshore revenues expressly to punish corporate support for voting rights. Closing those kinds of loopholes is a worthy goal on its own.
Rather, it’s that Republicans won’t actually target corporations in a way that imposes “consequences” with meaningful distributive implications, even though they themselves claim to want to target tax privileges that corporations enjoy.
“If Republicans are interested in ensuring mega-corporations pay their fair share — not just punishing perceived enemies that support voting rights — I’m all ears,” Wyden told me in a statement. “We could start with closing loopholes that allow companies to stash their profits in tax havens.”
Yet coverage of this whole dispute has treated the GOP attack on corporations as if it represents a genuine ideological shift. News organizations keep heralding the new “populist” GOP, or proclaiming a party at a “philosophical crossroads.”
In reality, as Josh Kraushaar reports, Republicans are operating from a playbook deliberately designed to keep the party’s supposed populist evolution in a purely cultural zone, with attacks on Big Tech “censorship” and (as we’re seeing now) corporate “wokeness.”
McConnell’s empty warning
“My advice to the corporate CEOs of America is to stay out of politics,” McConnell recently warned. “Don’t pick sides in these big fights.”
This is silly: As Mark Joseph Stern points out, McConnell is one of the most aggressive proponents of making it easier for corporations to influence “politics” via campaign contributions. McConnell only wants corporations to stop criticizing voter suppression.
But on top of that, McConnell’s threat is, from a distributional point of view, largely a toothless one. And that’s exactly how he wants it.
Go to Source
Powered by WPeMatico