CBS’s “Face the Nation” anchor Margaret Brennan pressed Rouse about Biden’s proposal to increase the corporate tax rate from 21% to 28% or potentially higher after Rouse said Biden’s $2 trillion spending plan is “good for the economy.”
“This is 15 years of higher taxes to pay for eight years of spending. Can you really say that’s not a cost?” Brennan asked.
Council of Economic Advisers Chair Cecilia Rouse talks with reporters in the Brady Press Briefing Room at the White House on March 24, 2021 in Washington, DC. Rouse said Sunday that raising taxes on corporations is “the right thing to do” so that corporations will “pay their fair share.” (Photo by Chip Somodevilla/Getty Images)
“I would say that the reason why the president is proposing these corporate tax increases is because that’s just the right thing to do,” Rouse said. “He believes we should be… encouraging these corporations to pay their fair share.”
The Biden administration announced a massive spending plan last week that it said would be paid for with an increase in the corporate tax rate and taxes on wealthy individuals. The plan would roll back part of former President Donald Trump’s 2017 tax cuts.
While Biden has been promoting the proposal as a way to tackle infrastructure concerns, a Fox News analysis of the “American Jobs Plan” shows that less than $750 billion of the spending would actually go towards infrastructure.
Despite Rouse saying Biden’s proposals are “good for the American economy,” the Tax Foundation says the corporate tax increases could reduce the GDP and eliminate 159,000 jobs.
“The economic literature shows that corporate income taxes are one of the most harmful tax types for economic growth, as capital investment is sensitive to corporate taxation,” an analysis by the group reads. “The corporate income tax raises the pretax return firms required to pursue investment opportunities, reducing the pool of investments that firms find worthwhile to pursue. This lowers long-run economic output, reducing wages and living standards.”
President Joe Biden delivers a speech on infrastructure spending at Carpenters Pittsburgh Training Center, Wednesday, March 31, 2021, in Pittsburgh. (AP Photo/Evan Vucci)
Senate Republicans vehemently oppose the spending plan. They say it is too expensive and goes far beyond infrastructure needs, such as replacing aging bridges and highways.
It “redefines infrastructure to include hundreds of billions of dollars of spending on priorities like health care, workforce development, and research and development,” Sen. Rob Portman, R-Ohio, said.
Sen. Ted Cruz, R-Texas, said the $2 trillion plan is “really just the Green New Deal lite masquerading as an infrastructure plan.”
“It contains sweeping far-left priorities like attacking blue-collar Americans’ right-to-work protections, a huge favor to big labor bosses,” Senate Minority Leader Mitch McConnell, R-Ky., said.