GOP Rep. Kevin Brady: Biden's Proposed Taxes Will Punish the Economy Rep. Kevin Brady, R-Texas, speaks at the Senate Finance Committee hearing on Feb. 25, 2021. (Tasos Katopodis/Getty Images)
By Jim Thomas | Monday, 03 May 2021 05:49 PM
Rep. Kevin Brady, R-Texas, told Fox Business' "Mornings with Maria" that President Joe Biden is "punishing the economy" through his proposal to tax capital gains and that these tax hikes will have a negative impact on small businesses and blue-collar workers.
He maintains that “this is another major economic blunder by President Biden. Look… after the tax cuts and Jobs Act investment surged in America, and as a result, it was blue-collar workers, it was local communities that benefited. When you double that tax, you have the opposite effect. In reality, you wouldn't… encourage a cure by punishing the most frequent and successful researchers. You don't rebuild a healthy economy by punishing those who invest in that local in the U.S. economy, and that's exactly what you have here. So, at the end of the day, America, again, American workers are the net loser in President Biden's capital gains proposal,” reported Fox Business.
Biden last week laid out the second part of his multi-trillion-dollar plan to overhaul the U.S. economy in the wake of the devastating coronavirus pandemic, reported CNBC.
The packages among other things, aim to make huge investments in infrastructure, child care and a host of other projects that will be paid for in part by hiking the top income tax rate to 39.6% and raising the corporate tax rate to 28%.
Biden’s proposals would reverse some key pieces of the 2017 tax-cut law, which Brady, then the chairman of the House Ways and Means Committee, helped craft. The $1.5 trillion legislation, which cut taxes for corporations and individuals, became a key achievement of former President Donald Trump’s term in office, reported CNBC.
The Texas Republican predicted “there’s going to be a real fight over these tax increases” and advocated for “a different approach on how we pay for” Biden’s “infrastructure” plan.
Brady argues, “There is a difference between the parties here, so we do, Republicans do, tax policy so that we can get more growth, more productivity, more investment, and we're more competitive around the world. Democrats do tax policy by villain. They pick a villain, whether it's successful people, multinationals, energy companies, and they just punish them for punishment’s sake and so they can spend those dollars elsewhere. But basically, Larry Lindsey says, really, you're not even generating maximum revenue for all this socialist agenda either. And so, at the end of the day, you know, you're punishing the economy, you're punishing businesses and blue-collar workers. And as you know, in some states, capital gains will be above 50%. So, in effect, the government has a greater claim over your investments than you do. That is… exactly the definition of socialism when the government has a greater claim over your earnings and your investment than you,” reported Fox Business.
Notwithstanding the fact that the GOP and the liberals are at odds with this proposed spending, Brady thinks that, Republicans and Democrats in Congress can “absolutely compromise” on an infrastructure plan, which has “always been a bipartisan issue” Brady said on CNBC’s “Squawk Box.”
The corporate tax rate structure should be one where the U.S. remains competitive with other world economic powers.
“I think most lawmakers understand we don't want a… business tax rate worse than China and on par with Syria. We don't want to go back to battle days of the last time Joe Biden was in the White House when we saw hundreds, if not thousands of businesses moving their jobs in manufacturing and headquarters overseas. That is a huge step backward. And I think the more lawmakers understand the impact here, I think the more gains we make. And I will tell you this, that we are going to fight it tooth and nail in the House of Representatives,” Brady argues.
Raising the corporate tax rate alone “makes America nearly dead last competitively and will drive jobs overseas, so I’m not sure we should be compromising by making America dramatically less competitive than our global competitors,” Brady said, adding that “we shouldn’t be funding infrastructure on the backs of American workers.”
While the Biden administration has called on Republicans to offer their own proposals, many Republicans have accused the White House of employing the rhetoric of unity, while governing like partisans.
Democrats hold narrow majorities in both chambers of the bitterly polarized Congress. The Senate is split 50-50 between the two parties, giving Vice President Kamala Harris the tie-breaking vote, reports CNBC.
Senator Mitch McConnell, R-Ky., on Monday accused Democrats of destroying the limited bipartisanship that led Congress to quickly pass multiple COVID stimulus bills last year. Democrats “just can’t resist stretching out the pandemic, using it as a rationale for additional spending,” McConnell said in remarks at the University of Louisville, reported CNBC.
“They want to raise the corporate rate to the highest in the world,” McConnell added. “We’re not going to revisit the 2017 tax bill.”
When he was asked Monday for his prediction on how the battle will play out on Capitol Hill, Brady said, “This is not a done deal by any means,” reported CNBC.
“These are dramatic increases in taxes that have real impacts on jobs here in America. There’s no question in my view this is going to sabotage the jobs recovery, it will drive jobs overseas,” Brady said.
“I think there’s going to be a real fight over these tax increases, and I predict, at some point I’m hopeful there’ll be a middle ground that we find, both on infrastructure and a different approach on how we pay for it,” he added.