Senate Democrats emerged from the White House on Tuesday with one message: If President Donald Trump wants $2 trillion in infrastructure improvements, he’ll need to raise taxes on the rich and corporations before relying on a higher gas tax.
“My view is that the pay-fors should not fall on the backs of middle class and working people,” Senate Minority Leader Chuck Schumer said after the meeting.
Trump and Democratic congressional leaders met on Tuesday for 90 minutes and agreed to pursue a $2 trillion plan to improve the nation’s roads, bridges and other infrastructure. They plan to meet again in three weeks, “at which time we will hear the president’s ideas for how he would pay for such a package,” said a joint statement from House Speaker Nancy Pelosi and Schumer.
A gasoline tax hike is considered by many experts as among the best ways of paying for the package. Administration officials have not ruled out supporting the first increase in the tax since 1993.
But Schumer, a New York Democrat, wants to see the wealthy helping to pay for the infrastructure improvements.
Sen. Ron Wyden of Oregon, top Democrat on the tax-writing Senate Finance Committee, had similar views. While no specific funding mechanisms were apparently discussed at length in the White House, Wyden said he made the point that any funding needs to be fair.
He said he had recently held four town meetings in rural Oregon counties where Trump won in 2016 and found “people are really concerned about fairness.”
While Wyden did not bring up the gas tax, he said he made the point that “If it comes out that the people who got all the tax relief last time basically go untouched but the working person, the guy who needs to get to work and needs to run errands, is going to have another financial hit, I don’t think It’ll pass the fairness test I hear people talking about.”
Even if the 18.4 cents a gallon gasoline tax and 24.4 cents a gallon diesel fuel tax went up 15 cents a gallon and was indexed to inflation, it would likely provide only a small percentage of a $2 trillion infrastructure plan — Congress’ Joint Committee on Taxation staff estimated that would increase revenue by about $237 billion over the next 10 years
While Schumer did not offer specifics Tuesday, Senate Democrats last year unveiled a multi-part plan that includes restoring the top income tax rate to 39.6 percent. The GOP’s 2017 tax cut legislation cut that rate to 37 percent. Democrats also wanted to restore the previous requirements for paying the estate tax and the pre-2017 requirements for paying the alternative minimum tax. They would also set the corporate tax rate, now 21 percent, at 25 percent.
None of these rollbacks are likely to go anywhere in the Senate, where Republicans control 53 of the 100 seats. Senate Majority Leader Mitch McConnell of Kentucky called the idea of scaling back the 2017 tax cuts “a non-starter.”
In the House, where Democrats have a majority, liberals tend to like the idea of combining a gas tax increase with a more progressive tax code. But they also see political trouble.
Rep. Raul Grijalva of Arizona, a leading House Democratic progressive voice, likes the idea, saying, “It would tax those who don’t pay their fair share.” But asked if many Democrats would vote to increase taxes, he said, “Probably not.”