Biden Commerce Sec Claims 'Not a Shred of Evidence' Trump Tax Cuts Grew Economy, Raising Taxes Not Hindrance
Secretary of Commerce Gina Raimondo claimed on Wednesday “there is not a shred of evidence” that the tax cuts implemented under former President Donald Trump increased economic growth.
Raimondo made the assertion while defending the administration’s $2 trillion “American Jobs Plan,” which calls for the corporate tax rate to be raised from 21 percent to 28 percent among other tax increases.
The Republican Tax Cuts and Jobs Acts of 2017 lowered the corporate income tax rate from 35 percent to 21 percent, taking the U.S. from among the highest tax rates in the industrialized world to squarely in the average, when combined with state corporate taxes.
President Biden’s #AmericanJobsPlan looks to increase the federal corporate tax rate to 28%, which would raise the U.S. federal-state combined tax rate to 32.34%, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China. pic.twitter.com/CmAU1xeyeK
— Tax Foundation (@TaxFoundation) April 5, 2021
By way of comparison, China — the second-largest economy in the world — has a corporate tax rate of 25 percent.
NBC News White House reporter Kristen Welker questioned Raimondo about concerns Republican lawmakers have raised about President Joe Biden’s plan hurting the U.S. job market, citing a study from the nonpartisan Tax Foundation showing a net job loss over the next 10 years.
“How do you respond to that criticism, in the long run, this plan kills jobs?” Welker asked.
“I don’t agree with that assessment,” Raimondo answered.
“With respect to taxes, there is not a shred of evidence to show that the cuts in 2017 increased growth or productivity. Actually, very little of it went into additional R&D. So the fact of the matter is the corporate structure today is broken,” she argued.
Commerce Secretary Gina Raimondo says “there is not a shred of evidence to show the [Trump] tax cuts in 2017 increased growth and productivity.” pic.twitter.com/SHIwrb60Mr
— Daily Caller (@DailyCaller) April 7, 2021
“Many, many companies — large profitable companies — pay no corporate taxes,” the former Rhode Island governor continued. “So I’d like to think we can all agree that it needs to be improved.”
Welker followed up, “If it is raised to 28 percent, though, that would put the United States at one of the highest in the world. Does it have to be 28 percent?”
Raimondo affirmed there is some room for negotiation, saying that perhaps the final rate would not be “quite 28.”
Like Raimondo, Biden has also claimed some corporations currently pay no federal taxes.
While promoting his American Jobs Plan in Pittsburgh last week, Biden said, “A fireman and a teacher paying 22 percent? Amazon and 90 other major corporations paying zero in federal taxes? I’m going to put an end to that.”
Neither of the points he made are accurate.
The National Taxpayers Union Foundation determined that the average tax rate for middle-income Americans (like firemen and teachers) earning between $50,000 and $200,000 was 9.3 percent after deductions and tax credits were applied.
In 2019, Amazon reported paying over $1 billion in federal income taxes and $2.4 billion in other federal taxes, including payroll taxes (financing Social Security and Medicare for all its employees).
Additionally, Amazon stated it paid nearly $9 billion in state and local taxes.
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It is true Amazon paid zero dollars in federal income tax in 2017 and 2018, thanks in part to deductions for reinvestments in the company and R&D tax credits, which companies use to grow their businesses and create jobs, CNBC reported.
Even in those years of owing no federal income tax, Amazon still had to pay its payroll taxes for the company’s hundreds of thousands of employees, and billions in other taxes.
Arguably Trump’s tax plan was not only pro-business but also pro-worker.
Prior to the COVID-19 shutdown, the U.S. was experiencing some of its best economic numbers in a long time, including a 3.5 percent unemployment rate — a half-century low.
Further, African-Americans, Hispanic-Americans and Asian-Americans were enjoying the lowest unemployment rates ever recorded.
With Trump’s policies still in place, the economy rebounded strongly — with unemployment back down to 6 percent in March from a peak of 14.8 percent in April 2020.
