re: Democrats Pin Midterm Hopes on Tax Hike Plan

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Senate Democrats on Wednesday proposed repealing major pieces of the just-passed tax law, in a plan that would raise taxes on corporations, estates and high-income households to pay for $1 trillion in new infrastructure spending.

The plan will almost certainly go nowhere with Republicans in charge of Congress and the White House. But it provides a first clear signal about Democratic priorities on tax policy after the passage of the Tax Cuts and Jobs Act, and establishes a clear contrast for the 2018 midterm elections.

The proposal would set the corporate tax rate at 25%, up from today’s 21% but still well below the 35% that was in place until President Donald Trump signed the new tax law in December.

Democrats also propose to cut the estate tax exemption from $11.2 million per person back toward the $5.6 million in effect under the old tax law. They would set the top individual tax rate back at 39.6%, up from 37%, and they would expand the alternative minimum tax, a parallel tax system for top-earning households. The GOP law, which passed without a single Democratic vote, narrowed the AMT’s scope from millions of households, many in Democratic-leaning states such as New York and California, to a few hundred thousand.

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