As talks continue on Capitol Hill about a possible infrastructure overhaul, a top Republican lawmaker is warning against potentially raising the corporate tax rate to pay for any major improvements to the country’s roads and bridges.
Texas GOP Rep. Kevin Brady, the ranking member of the Democratic-controlled House Ways and Means Committee, gave his warning as he asked a question at a hearing Wednesday.
“One of the ideas floating around here is increasing the corporate tax rate to 24% and using those dollars for infrastructure. So can you tell us why that is such a bad idea — and if the chamber would oppose that approach?” Brady asked of the U.S. Chamber of Commerce’s president and CEO, Tom Donohue.
Corporate income tax rates have fallen to 21% from 35% in the wake of the Tax Cuts and Job Act, which President Donald Trump signed into law in December 2017.
“We’re not going to be supporting that idea,” responded Donohue, whose group lobbies for big business. He said there should be action on infrastructure, but not by “taking apart” other government efforts that have created economic benefits.
Donohue and other speakers at Wednesday’s hearing on infrastructure issues — held by the House Ways and Means Committee — voiced support for a gasoline tax to pay for big infrastructure improvements. In his comments before the panel, Oregon Democratic Rep. Peter DeFazio, who heads the House Transportation and Infrastructure Committee, reiterated his view that lawmakers wouldn’t face political damage if they backed increasing taxes on gasoline.
Infrastructure spending has looked like an area that could get bipartisan support following last year’s midterm elections that resulted in a divided Congress. But Trump’s State of the Union speech last month offered no details on the issue, leaving some analysts wondering about the chances for a bill.
Donohue on Wednesday called for bipartisan action, noting that he and AFL-CIO President Richard Trumka, who also spoke at the hearing, are in agreement on the need for spending on infrastructure.
“I urge the members of this committee to find a common cause on this national priority just as business and labor have,” he said.
Not all speakers at the hearing demanded major action by Washington.
“There are very real infrastructure needs in the U.S., but they are not uniform across infrastructure asset classes and are not primarily the result of a lack of federal funding. A more targeted approach is needed to best address these challenges,” said Marc Scribner, a senior fellow at the Competitive Enterprise Institute, a libertarian think tank. “Contrary to common narrative, infrastructure does not face a broad, immediate crisis in the U.S.”