The Republicans Want You to Pay Amazon's Infrastructure Tab
By asking everyone other than corporations to pay for new infrastructure, Republicans have handed Democrats the perfect issue for '22
As President Biden and Republicans engage in negotiations over a possible infrastructure deal, there are has been a lot of chatter about the political risks for Democrats who embrace tax increases on the wealthy and corporations to pay for the Biden plan (Spoiler alert: there are none). To the extent that there has been any discussion of the political risks for Republicans, it’s been about whether the GOP would upset the MAGA base (and the former President) for acknowledging the legitimacy of the Biden Presidency by cutting a deal with him. However, the political coverage of the infrastructure talks is largely missing the element with the biggest implications for the 2022 midterms — Republicans are opposing Biden’s corporate tax increase to pay for his plan and are instead asking working-class Americans to pay for their plan.
Yes, you read that correctly. The party that brands itself as anti-tax and pro-working class thinks Amazon and Exxon shouldn’t have to pay for new roads and bridges, but you should.
The very bizarre Republican decision to support ask middle and working-class people to pay more while opposing tax hikes on the rich is a massive opportunity for the Democrats — if we don’s screw it up.
The Republican Pay Fors Explained
Senate Republicans have been less than forthright about who is paying for new infrastructure under their proposal. Two ideas have been floated. First, they keep using the seemingly innocuous term “user fees” to describe how their plan is financed. The Republicans don't want you to know that the “user” being asked to pay the fees is you.
The term user fees in this context usually refer to a few different things — an increase in the gas tax, a per-mile charge for certain types of vehicles, and an increase in tolls. The Republican proposal is light on details. As Senator Romney told Politico:
"The pay-for ought to come from the people who are using it," he said. He also suggested that the infrastructure plan should include a mileage charge to ensure that electric vehicle drivers are paying into the system.
The Republicans have ruled out an increase in the gas tax, but a vehicle mile tax — at least for certain types of vehicles — has been on the table. User fees in any form are largely regressive, with the financial burden being shouldered by the least well-off.
The second Republican idea is perhaps even more politically disastrous and substantively stupid. Senate Republicans want to take money from pandemic relief efforts to pay for new roads and bridges. Once again, they have offered no details other than using the term “unused,” which almost certainly means funds earmarked for things Republicans oppose like money to help state and cities keep teachers, firefighters, and other frontline workers on the job. Congress passed these COVID funds to help you and your community during a pandemic that is not yet over. Ads about Republicans robbing money from the COVID relief fund because they want to protect corporate tax breaks write themselves.
The details matter less than the principle, and the principle is that if you want better infrastructure, you have to pay for it, but corporations don’t. Once again, the Republicans are asking the working-class Americans who make up a disproportionate share of their base to pick up the tab for yet another sop for their wealthy patrons in Corporate America.
I am a bit mystified that the Republican’insitance that working-class Americans pay for their infrastructure plan isn’t getting more attention. The demand for user fees barely merits a mention in the amusingly breathless coverage of the negotiations.
Politically, the Republican position is insane. Opposing an increase in corporate taxes while demanding that everyone else pay more for roads would be an A+ answer to the question — “what’s the best way to lose an election?”
If you don’t believe me, listen to the Republicans. Earlier this year, Secretary of Transportation Pete Buttigieg offhandedly floated a vehicle mile tax as a possible way to pay for the Biden plan. Florida Senator Rick Scott, the National Republican Senatorial Committee chair, immediately fired off a press release accusing Biden of violating his promise not to raise taxes on people who make less than $400,000 a year.
It’s also worth noting that in his rush to attack Biden, Scott admitted that the current position of his party amounts to a tax increase. Something to file away for some ads in the 2022 Florida Senate race when Marco Rubio is trying to attack his Democratic opponent for raising taxes.
To say voters strongly prefer the Biden plan would be a massive understatement. According to a recent Invest in America/Data for Progress poll:
By a 41-point margin, likely voters support paying for investments in infrastructure by changing how corporations are taxed. This includes a majority of Democrats, Independents, and Republicans, who support changing the corporate tax code as opposed to using unspent pandemic relief funds and raising user fees by margins of 41-points, 43-points, and 20-points, respectively.
To take advantage of this massive political opportunity, Democrats need to do two things. First, we need to scream from the rooftops about the Republican plan. One reason reporters aren’t writing about it is that Democrats aren’t yelling about it. I am sympathetic to the desires of the Biden White House and the Senate Democrats to engage in these negotiations in a good-faith manner. The talks are, however, almost certainly doomed. The gap between the parties is too far to bridge. There is undoubtedly a fear on the Democratic side about saying or doing something that would give the Republicans cause to walk away from the table and blame our side for the collapse. In my view, that risk does not outweigh the opportunity cost that comes from not drawing attention to the politically disastrous Republican plan.
There is an imperative to make the Republican position on corporate tax increases and user fees the central issue in the negotiations. Make Joe Biden’s insistence on asking corporations to pay more and his refusal to agree to the Republican plan to de facto raise taxes on people making less than $400,000 (Thanks, Rick Scott!) the reason the talks broke down. This is always a delicate dance because of the necessity of keeping Joe Manchin on board. It’s not easy, but it’s important.
Second, moderate Democrats need to avoid snatching defeat from the jaws of victory. Axios recently reported that moderate Democrats are open to user fees. Giving Republicans political cover to make a sacrifice at the altar of bipartisanship would be a terrible error. Especially since there is no chance, President Biden would violate his own tax pledge, and Republicans seem much more interested in running out the clock than striking a deal.
Political opportunity only knocks so many times in an election cycle. The Republicans have stumbled into giving Democrats an issue to tell a powerful story about who the party will fight for if they get power in 2022. We cannot afford to pass it up.