Senator Schumer speaks about the importance of equality at the It Gets Better press conference. Photo provided by the office of Senator Chris Coons.
Democrats currently vying for the party’s presidential nomination are unveiling their plans for government. Many of the plans include an idea known as “Medicare for All.” Senator Kamala Harris from California has released her own “Medicare for All” plan, and to pay for it, her plan would raise taxes domestic and offshore profits at the same rate. The idea could be opposed by Harris’ own party leadership, as Senate Minority Leader Chuck Schumer and House Ways and Means Committee Chairman Richard Neal helped end the practice. Bloomberg’s Laura Davison reports:
That could face resistance within her own party, because it would unwind one of the few parts of the 2017 Republican tax law that Democrats helped develop, even as it may resonate with voters who want to see corporate America pay more taxes.
The tax overhaul passed without any Democratic votes and largely no input in the drafting. But prominent Democrats — including Senate Minority Leader Chuck Schumer and House Ways and Means Chairman Richard Neal — had in the years before that pushed to make it easier for U.S. companies to operate globally, a change that Republicans ultimately included in their 2017 tax law.
‘Territorial System’
The overhaul cut the corporate tax rate to 21% and moved toward a so-called “territorial system” under which companies pay the U.S. banner rate on domestic profits only. The law included a minimum tax so corporations operating in low or no-tax countries still pay some tax on their earnings.
Democrats say they would have backed a higher rate — more like 28% — but the underpinnings mirror a bipartisan international tax plan Schumer and Senator Rob Portman, an Ohio Republican, released in 2015. Democrats say they opposed the law because it cut taxes too much for corporations and the wealthy and didn’t do enough for middle-income earners.
“As the importance of success in foreign markets has grown, the United States has become less competitive abroad because of its worldwide system of international taxation,” Schumer and Portman wrote in their 2015 report. “No matter what jurisdiction a U.S. multinational company is competing in, it is competing at a disadvantage.”
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Jeremy Jones, CFA
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