As the debate rages on Capitol Hill over President Biden’s Build Back Better plans, the question of how to cover the costs looms large.
Biden has proposed a package of tax increases on the wealthy and corporations. At the center is a corporate tax rate hike from the current 21 percent to 28 percent, which would generate an estimated $858 billion over a decade.
A Data for Progress poll shows this would be highly popular, with 70 percent of Americans in support.
It would also be transformative.
For years, corporations have been contributing a shrinking slice of the federal budget. Between 1952 and 2019, the percentage of total federal tax revenue coming from corporate income taxes fell from 32.1 percent to 6.6 percent.
Collecting more tax revenue from profitable large corporations could make a real difference in people’s lives.
The Institute for Policy Studies has calculated that the $858 billion from Biden’s proposal would be enough to cover several key White House investments in our human infrastructure — including home care, affordable housing, universal preschool, and free community college.
First, Biden has called for $400 billion to expand access to affordable home care and to raise wages for home care workers.
This is desperately needed. The people providing these critical services — a majority of whom are women of color — are underpaid and overworked.
For example, in New York State the median income for home care workers is just $22,000. No wonder there’s a shortage of home care workers in the Empire State. But as the baby boomer generation continues to age, there will be an even greater demand for home care services.
Second, Biden is calling for $212 billion for building, preserving, and retrofitting more than two million homes and commercial buildings to address the affordable housing crisis.
According to the National Low Income Housing Coalition, an estimated 6.8 million more affordable housing units are needed to meet the current demand. Biden’s proposal would be a major step towards ending homelessness in America.
Third, the president’s budget includes putting $139 billion towards universal preschool for all three and four-year-olds. The National Institute for Early Education Research found that 48 percent of three-year-olds and 33 percent of four-year-olds were not enrolled in preschool in 2019.
The benefits of a preschool education to a young developing mind are immense, a recent study from the National Bureau of Economic Research found. It found that children who attended preschool were significantly more likely to graduate from high school and attend college than kids who didn’t.
Finally, the president has proposed $109 billion to fund two years of free community college for all Americans. This would not only create educational opportunities for young citizens, but would also open doors for hundreds of thousands of Dreamers, young immigrants who are not eligible for other federal and state higher education subsidies.
The modest corporate tax increase Biden proposed could cover all of these initiatives. But wealthy Americans are trying to block it — for entirely selfish reasons. The richest 1 percent benefits the most from our current low corporate tax rate because they own more than half of corporate stock and mutual funds.
Public investments in vital health care, housing, and education programs would advance the betterment of all. And corporations need to pay their fair share.