GOP Tax Scam had little growth, more profit-hoarding for businesses. So why not tax them for infrastructure they'll use?

Unlike the COVID relief package that passed in March, President Biden's plans for infrastructure are at least partially paid for with tax increases. Under that plan, corporations would see their marginal rates rise from their current 21% to 28%, and Biden will also close some loopholes for multinational corporations that operate in America but duck a lot of our taxes.

Predictably, Moscow Mitch McConnell has claimed the Senate GOP won't give one vote for Biden's infrastructure package, because of deficit, job creators, herble-gurble...But don't shed too many tears for CEOs and their companies, as they've made out like bandits under the 3 years that McConnell, Donald Trump, and the rest of the Congressional GOP got their Tax Scam passed into law. With the biggest companies in America being some of the biggest beneficiaries, as another Senator notes.

Cost to consumers:

Nike Air Max 270s: $150

Dish Network basic package: $64.99

FedEx "large" box delivery: $20.00

Zoom Pro monthly membership: $14.99

Federal income taxes paid in 2020:

Nike: $0

Dish Network: $0

FedEx: $0

Zoom: $0

Yes. We must end our rigged tax code.

— Bernie Sanders (@BernieSanders) April 4, 2021

Economist Justin Wolfers has this illustration of the recent history of marginal corporate tax rates, and then adds in what they would be under Biden's infrastructure plan. which shows that what Biden is asking for merely reverses half of the tax cut corporations got in the GOP Tax Scam of 2017.

Some context on how Biden plans to fund his infrastructure package. pic.twitter.com/0U5zuXEhaI

— Justin Wolfers (@JustinWolfers) March 31, 2021

And the evidence is quite clear that along with being a giveaway that helped the rich over everyday people, 3 years of the GOP Tax Scam didn't trickle down into an economic boom or sustainable growth. That's especially true when you look at manufacturing, which is frequently cited as the sector that would benefit from lower tax rates to encourage investment.

You can see that manufacturers' profits have been consistently been between $135 million and $160 million a quarter for the last 4+ years, with 2 obvious exceptions.

The COVID recession of the first half of 2020 hammered everybody, so that's not surprising. But look at that gyration between the decline of Q4 2017, and the big profits of Q1-Q2 2018. And the answer to why that happened seems obvious.

Manufacturers gave out big bonuses to execs (and a few workers) and made additional investments in late 2017 to have lower profits and pay fewer taxes. Then they hoarded profits that were taxed at a lower rate in 2018/

This connection is even more clear when you realize that manufacturers' profits stayed strong in 2019, but the growth in manufacturers' sales peaked at the end of 2018. In the real economy, manufacturing fell recession in 2019, and it kept declining in 2020.

Sure, there are other factors at play, such as the overall demand for products and Trump's Trade Wars in 2019, and COVID cutbacks in 2020. But it certainly does NOT mean that the Tax Scam led to sustainable investment and growth in that sector. Which is what RW hacks have tried to sell for decades with that "job creator" BS.

We also have a strong indication that the GOP Tax Scam gave huge write-offs to companies in Wisconsin, because the Legislative Fiscal Bureau noted in May 2019 that businesess have willingly paid more taxes at the state level in order to take advantage of that lower Federal tax rate.

At the time of the January [revenue] estimates, corporate income/franchise tax collections had grown by 23.1 % through December, compared to collections through the same period in the prior year. This higher year-to-date growth was attributed to corporate taxpayers shifting taxable income from tax year 2017 to tax year 2018 by accelerating deductible expenses in response to the TCJA (the federal tax rate for C corporations was reduced from 35% to 21 % beginning in tax year 2018). Corporate collections were expected to moderate over the remainder of 2018-19 as the income shifting effects of the TCJA grew more distant and the revenue reductions associated with certain tax law changes, such as the expansion of Section 179 expensing provisions, were expected to reduce corporate collections. Over the 2019-21 biennium, the January forecast anticipated continued growth in corporate tax collections attributable, in part, to pass-through entities. First, some pass-through entities were expected to change their filing status to C corporations in response to the TCJA. Second, other pass-through entities were expected to pay state taxes at the entity level under Act 368. DOR indicated it would report entity-level tax paid by S corporations and partnerships under the corporate income/franchise tax, rather than the individual income tax. Although S corporations could elect to pay the entity level tax retroactively for tax year 2018, Act 368 was not expected to significantly shift the composition of corporate and individual income taxes in 2018-19.

Following the January estimates, corporate tax collections did not moderate as expected from January through April. Instead, collections grew by $330 million compared to the same four-month period in 2017-18. Excluding pass-through withholding (which is reconciled by DOR at the end of each fiscal year), year-to-date collections for 2018-19 are now more than 70% above the comparable period in the prior year. The higher collections are partly attributed to the continued one-time effects of corporations shifting deductible expenses and taxable income between tax years 2017 and 2018 in response to the TCJA. In addition, preliminary data from DOR suggest that S corporations remitted over $115 million to-date, significantly higher than previously estimated, attributable to those entities electing to be taxed at the entity level under Act 368 for tax year 2018 (partnerships were not eligible to elect entity-level taxation in 2018). The higher amount of tax being remitted under the entity-level tax is expected to shift additional revenue that previously would have been reported under the individual income tax to the corporate income/franchise tax and is expected to add volatility in estimated payments, refunds, and final payments under the two taxes over the next few years.

If you look at the first three years of corporate tax revenues under the GOP Tax Scam, you'll see a total of more than $400 billion in reduced taxes that these businesses paid compared to what the Congressional Budget Office projected in June 2017, 6 months before thew Tax Scam was passed.

Sure, some of that is 2020 COVID World, but most of this is due to the Tax Scam allowing profitable corporations to dodge taxation.

So why not reverse that post-Tax Scam trend of profit hoarding over salaries/investment with higher corporate tax rates at the Federal level? After all, corporations are likely to be major beneficiaries from better infrastructure, making it more efficient to deliver their products and potentially getting more contracts to do this extra work, Why shouldn't they pay some more of the taxes for it?