President Biden is pushing hard to pass yet another “infrastructure” bill that would significantly increase taxes on corporations and Americans who earn over $400,000, but his socialist sounding plan is reported to be quickly “losing momentum,” and the President’s attempt to pass a major tax hike within his term might have been thwarted.
CNBC reported that the Biden administration’s tax plan faces grim odds in an economic context that is unfit to higher tax rates, as economists warn that a tax hike at this point would pose a serious risk to economic recovery. Furthermore, the political will in Washington isn’t likely to pass such an extreme tax hike either, as GOP legislators stand “resolute against tax increases.”
Biden has been making a major effort to secure his second “infrastructure” bill since the start of the year, at one point, even putting pressure on Democrats and Republicans to pair his second bill with the first one. Biden’s goal was to erase many of the tax cuts which President Trump instated, making the tax hike a sort of political trophy to mark his term in office.
Former Treasury official, Tony Fratto, who served under the George W. Bush administration, said that while the “fight’ over the bill isn’t quite concluded, those favoring the bill have a steep uphill battle ahead of them. He points out that increased taxes against corporations would harm their changes in a slowly recovering economy, and could lead to a “squelch [in] the return to… job creation,” adding that there’s still “millions of people out of work.”
Even Senator Mitt Romney (R-UT) who’s reputation for playing easy with Democrats and who worked on the Senatorial compromise committee for the first infrastructure plan is stalwartly opposed to Biden’s proposed tax hikes. Swing vote Senator Joe Manchin (D-WV) says that he’s “open” to the bill but is still on the fence.
Analysts suggest that Biden’s tax hikes would hurt wages in the short term, further hampering economic recovery.
Ironically, the largest hurdle Biden must pass in order to secure his bill is the Democrat party. Democrats and Republicans reached a bipartisan compromise on the first infrastructure bill, rejecting House Speaker Nancy Pelosi’s (D-CA) demand to either pass both infrastructure bills or none at all.
The action set up a power-game showdown between House Democrats and the longtime Speaker.
Senate Majority Leader Chuck Schumer (D-NY) says that he intends to get both bills passed in the coming weeks, by using bipartisan support for the first bill and tactically dodging the need for Republican support for the second.
Author: Molly Parsons