Most Americans think corporations should pay for improvements.
The idea, called trickle down theory, goes like this, according to Merriam Webster: "...financial benefits given to big business will in turn pass down to smaller businesses and consumers."
But here's the problem: How do we pay for improvements -- to bridges, roads and the electrical grid, for starters -- that corporations need to do business? This is a much talked-about subject in Washington, as President Joe Biden asks lawmakers to consider raising corporate taxes to pay for a plan to rebuild the country's aging infrastructure. According to a White House news release, the plan will:
It's also a step away from the trickle down theory. To be sure, Biden's plan has drawn opposition from political opponents, and the president has said he is willing to negotiate the percentage of the increase.
But will this matter to American workers? Does it mean that corporations won't have money to trickle down? According to a study by the nonpartisan Congressional Research Service, when corporate taxes were cut in 2017, much of the money didn't find its way to the pockets of American workers. The money more likely went "for a record-breaking amount of stock buybacks, with $1 trillion announced by the end of 2018."
Besides, as far as Americans are concerned, someone has to pay the bill. Indeed, "Fifty-four percent of voters said they support making improvements to America’s infrastructure funded by taxes on those making more than $400,000 per year and increases to the corporate tax rate," according to new Morning Consult/Politico polling.
But here's the problem: How do we pay for improvements -- to bridges, roads and the electrical grid, for starters -- that corporations need to do business? This is a much talked-about subject in Washington, as President Joe Biden asks lawmakers to consider raising corporate taxes to pay for a plan to rebuild the country's aging infrastructure. According to a White House news release, the plan will:
- Fix highways, rebuild bridges, upgrade ports, airports and transit systems.
- Deliver clean drinking water, a renewed electric grid, and high-speed broadband to all Americans.
- Build, preserve and retrofit more than 2 million homes and commercial buildings, modernize schools and child care facilities, and upgrade veterans’ hospitals and federal buildings.
It's also a step away from the trickle down theory. To be sure, Biden's plan has drawn opposition from political opponents, and the president has said he is willing to negotiate the percentage of the increase.
But will this matter to American workers? Does it mean that corporations won't have money to trickle down? According to a study by the nonpartisan Congressional Research Service, when corporate taxes were cut in 2017, much of the money didn't find its way to the pockets of American workers. The money more likely went "for a record-breaking amount of stock buybacks, with $1 trillion announced by the end of 2018."
Besides, as far as Americans are concerned, someone has to pay the bill. Indeed, "Fifty-four percent of voters said they support making improvements to America’s infrastructure funded by taxes on those making more than $400,000 per year and increases to the corporate tax rate," according to new Morning Consult/Politico polling.
To know more:
- Center for American Progress: Trump's corporate tax cut is not trickling down, by Galen Hendricks, Seth Hanlon, and Michael Madowitz, Sept. 26, 2019.
- Congressional Research Service: The Economic Effects of the 2017 Tax Revision: Preliminary Observations, Updated June 7, 2019 by Jane G. Gravelle, senior specialist in economic policy and Donald J. Marples, specialist in public finance.
- Merriam-Webster: Trickle down theory.
- Morning Consult-Politico: National Tracking Poll, March 26-29, 2021.
- White House Fact Sheet: The American Jobs Plan, March 21, 2021.