Democratic presidential candidates like Joe Biden and Kamala Harris have talked about repealing the GOP’s tax overhaul. Yet a large-scale rollback is unlikely. Instead, two other forces could slowly unravel the law -- Democrats currently in power in the House and President Donald Trump’s trade policies.
House Democrats, in a package of tax legislation that could be debated as soon as this week, will propose raising the corporate tax rate to 22% from 21% and lowering the estate tax exemption.
They say that would help offset the cost of expanding the earned income tax credit for low-wage workers, broaden tax credits for families with children and renew expired tax breaks for the bio-diesel and renewable energy industries.
The Republican-controlled Senate will reject anything that threatens to diminish their signature legislative achievement, but the House plan is a taste of what could come if the balance of power in Washington shifts after 2020.
Most Democrats are comfortable with a corporate tax rate of at least 28%, with some willing to go much higher.
Democrats almost universally agree the 37% tax rate on top earners should go back to what it was before the 2017 overhaul -- 39.6% -- and there’s appetite for a much higher top rate on the wealthiest Americans. Some progressives have praised New York Representative Alexandria Ocasio-Cortez for her suggestion to raise the top tax rate to 70% for those earning millions.
The biggest threat to the overhaul isn’t a second sweeping measure that wipes out the entire law, rather it is more likely to be rolled back bit-by-bit as Democrats see it as a way to pay for their agenda items, which have spanned from tax cuts to middle-earners to universal health coverage.
This country wasn’t built by Wall Street bankers, CEOs, or hedge fund managers. It was built by the American middle class. It’s time we recognize that.
We’ve got to build an economy and a tax code that rewards work, not just wealth.
— Joe Biden (@JoeBiden) June 15, 2019