Two senior Democratic senators suggested several corporate tax increases on Friday to help pay for President Biden‘s massive $3.5 trillion expansion of the federal safety net.
Senate Finance Committee Chairman Ron Wyden of Oregon introduced legislation with his Senate Banking Committee counterpart, Sherrod Brown of Ohio, to increase taxes on limited liability partnerships and penalize stock buybacks.
The buyback proposal, authored by Mr. Brown, would impose a 2% tax on the amount that publicly traded companies spend annually on purchasing their own stock. Democrats have long railed against the practice, saying it is “self-serving” and only drives up the companies’ stock prices.
“Instead of spending billions buying back stocks and handing out CEO bonuses, it’s past time Wall Street paid its fair share and reinvested more of that capital into the workers and communities who make those profits possible,” Mr. Brown said.
In an effort to make stock buybacks even less attractive, the lawmakers propose making the new levy non-deductible against corporate tax income. Essentially, that means that businesses would have no recourse or loophole to get out of paying the tax.
Similarly, the bill would make it more difficult for corporate partnerships, including large law firms, to avoid paying taxes by divvying up income or profits among several individuals.
“This proposal simply reduces complexity by closing loopholes that allow those at the top to pick and choose when, and whether, to pay tax,” said Mr. Wyden, an Oregon Democrat.
The lawmakers say that the two changes could boost federal revenue by more than $270 billion over the next decade. Democrats want to use the new money to pay for Mr. Biden‘s massive social spending bill.
Democrats are pitching the $3.5 trillion bill as “human infrastructure” to sell to voters. They suggest the bill complements the $1.2 trillion bipartisan infrastructure bill, which focuses on roads, bridges and airport projects.
In reality, the bigger bill amounts to a wish list of liberal priorities such as proposals for climate change, amnesty for illegal immigrants, tuition-free community college and expanded health care.