The sharp divergence between Republicans and Democrats over the 21% corporate income tax rate was on display Tuesday at the House Ways and Means Committee as Democrats began making the case for a large increase should their party succeed in November’s elections.

Several Democratic presidential candidates -- including Senators Bernie Sanders, Elizabeth Warren, and former South Bend, Indiana, Mayor Pete Buttigieg -- propose pushing the rate as high as 35%, its level before a Republican Congress enacted a massive tax cut in 2017.

President Donald Trump has advocated for a rate as low as 15%, creating a 20 percentage point spread between leaders in the two parties.

That amounts to a win for the status quo, essentially locking in the Republicans’ 21% corporate rate for several more years unless Democrats sweep control of Congress and the White House.

“The corporate income tax falls short of what our country needs,” House Ways and Means Chairman Richard Neal, a Massachusetts Democrat, said at Tuesday’s hearing. “Corporations are paying less than ever, and corporate tax revenues are at their lowest level in history outside of a major recession.“

Acceptable Rates
The window of acceptability in each party has shifted in opposite directions.

Republicans tout their tax law as a key victory and are preparing to push for a second round of cuts if Trump keeps his job for another four years -- though that would be tricky unless the GOP also wins back the House. Democrats, eager to raise revenue for new social programs, want corporations to pay significantly more.

As recently as five years ago, Democrats and Republicans alike widely backed corporate tax rates in the mid-to-high 20s. President Barack Obama called for a 28% rate, while former House Ways and Means Chairman Dave Camp, a Republican who didn’t seek re-election in 2014, pushed for a 25% rate during his tenure.

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