Democrats have released a pair of proposals that would reverse major aspects of the recently enacted tax reform bill, the Tax Cuts and Jobs Act. The proposals would undo the international changes and fund new infrastructure spending with an increase in both corporate and individual rates.
The initiatives stand little chance of enactment this year and are largely about messaging in advance of the November elections. They signal that Democrats intend to make reversing the tax changes a key tenet of their campaign platform.
The No Tax Breaks for Outsourcing Act was introduced by Rep. Lloyd Doggett, D-Texas, and Sen. Sheldon Whitehouse, D-R.I., and would essentially tax foreign income immediately at full U.S. rates by expanding the new minimum taxes enacted as part of tax reform. Senate Democrats meanwhile re-launched and infrastructure initiative that would be funded by:
- Raising the corporate rate from 21% to 25%
- Raising the top individual rate from 37% back to 39.6%
- Reinstating the corporate alternative minimum tax and 2017 individual AMT exemptions
- Reversing the increase in the estate and gift tax exemption
The bills are unlikely to go anywhere with President Donald Trump in office, but could emerge as major issues when the midterm election races heat up. Democrats should be expected to unveil other proposals in the coming months attacking parts of the tax reform bill.
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