Surely Republicans will go out of their way to support this goal, right?
Judging from recent statements by Senate Minority Leader Mitch McConnell (R-Ky.) And other Republicans, they should. But they will likely oppose these changes or anything that might accomplish the same goal.
This will reveal the GOP threats against businesses as largely toothless – just as they are supposed to be.
McConnell made big news by stating that voting rights defenders “are behaving like a lively parallel government,” adding that they “will have dire consequences if they become a vehicle for radical left-wing mobs.”
What are these “consequences”? A McConnell spokesman won’t say it. But other Republicans have threatened certain actions. Georgian lawmakers have tried to end a tax break for Delta Air Lines to punish the company for correctly indicating that its new electoral law will make voting difficult.
Meanwhile, Republicans in Congress have threatened to crack down on Major League Baseball’s antitrust exemption after MLB pulled the Atlanta All-Star game in protest of the electoral law.
Crucially, Republicans claim they want to abolish special privileges that companies enjoy. This is intended to give these movements an aura of being in the public interest as opposed to a bare threat to use legislative power to cool down criticism of the repression of GOP voters.
But when Republicans are looking for special privileges, some of the biggest are the perks that multinational corporations are currently using to play the tax system.
The new democratic plan
The Democratic proposal advocated by Senator Ron Wyden of Oregon, chairman of the finance committee, would target these privileges. It would fix problems caused by the Republican tax cuts passed in 2017, which gave the rich and corporations most of the benefits.
This tax law should discourage multinational corporations from shifting income to overseas subsidiaries in order to minimize taxes. The law did this in part by introducing a new minimum tax on certain types of income earned abroad.
However, this has proven to be insufficient. To make this easier, tax experts say that this provision exempts some foreign-earned income, sets the tax rate too low and structures the tax to allow for even more gambling, and encourages companies to keep moving their profits overseas. A recent report by the Joint Tax Committee found that the 2017 law had minimal impact on this practice.
Democrats would fix this by increasing the tax rate and tightening their request to remove these incentives. This is part of a larger series of actions by President Biden and Democrats to increase corporate taxes and raise revenue in urgent public need.
These revenues would help fund the huge public spending needed to save the economy from the collapse of the Covid-19 and invest in a massive new employment and infrastructure plan to secure our economic future.
The important point here is that Republicans themselves say they want to deter multinational corporations from protecting offshore tax profits. It is precisely for this reason that they included the (inadequate) provisions in the 2017 tax bill.
Now that these provisions aren’t working as planned, Republicans would support such changes, or at least have a real debate on how to get more revenue.
Meanwhile, the Biden government is also proposing a new “global minimum tax” to prevent a race to the bottom as countries lure multinational corporations into lower taxes.
This would pose challenges for implementation. But, as Ryan Cooper notes, it would be a revolutionary response to a serious global problem that is starving revenue-starving countries to address major public problems.
The Republicans are already against it, too. And they ruled out raising the corporate tax rate, despite Biden’s suggestion of only partially getting it back the way it was before the Republicans cut it.
The GOP’s fake “populist” twist
This is not about the fact that Republicans should explicitly support targeting offshore revenue to punish corporate support for voting rights. Closing such gaps is a worthy goal in itself.
Rather, Republicans do not target corporations in a way that has “ramifications” with significant distributional implications, even though they themselves claim to be targeting tax privileges enjoyed by corporations.
“If Republicans are interested in ensuring that mega-corporations are paying their fair share – and not just punishing perceived enemies who support the vote – I’m all ears,” Wyden said in a statement. “We could start by filling in the loopholes that allow companies to stash their profits in tax havens.”
However, coverage of this whole dispute has treated the GOP attack on businesses as if it represented a real ideological shift. News organizations continue to announce the new “populist” GOP or proclaim a party at a “philosophical crossroads”.
In reality, as Josh Kraushaar reports, the Republicans are working from a playbook that is deliberately designed to keep the party’s supposed populist development in a purely cultural zone, with attacks on the “censorship” of Big Tech and (as we now see) the “alertness” of the company. ”
McConnell’s empty warning
“My advice to American CEOs is to stay out of politics,” McConnell recently warned. “Don’t choose sides in these great battles.”
This is silly: As Mark Joseph Stern points out, McConnell is one of the most aggressive advocates making it easier for companies to influence “politics” through campaign contributions. McConnell just wants companies to stop criticizing voter suppression.
Additionally, from a distribution standpoint, McConnell’s threat is largely toothless. And that’s exactly how he wants it.