WASHINGTON -- Among the longtime cornerstones of Republican economic policy is the argument that the U.S. corporate tax rate is too high, stagnating growth. This argument is becoming increasingly bipartisan, championed by President Barack Obama's deficit commission and endorsed by Obama himself during this year's State of the Union address.
But deficit hawks still want tax cuts to be "paid for" -- that is, offset by spending cuts elsewhere in the budget -- despite the conservative claim that the increased economic activity encouraged by lower rates will result in a wider pool of taxpayers.
On Friday, Sen. Jeff Sessions (R-Ala.) took to the floor of the upper chamber to call for cuts in corporate tax rates, and announced that he'd be comfortable offsetting the cuts by raising the rates in other places.
"I believe the American people are open to these kinds of ideas," Sessions said. "I think the idea that this is not a popular plan because, 'Whoa, you're talking about cutting taxes on corporations, nobody wants to do, they don't believe [in], that, the American people won't support that.' I think the American people understand we can't tax our corporations more than they are doing in Canada, 34 percent to 16 percent, and expect to win competition for jobs and business. We have got to make some of those changes, even if we have to raise taxes somewhere else, we've got to look at the taxes that are killing jobs and try to make our tax policy further growth and prosperity, not austerity." [emphasis added]
For the record, the top marginal corporate tax rate, for businesses with net taxable income over $18,333,333, stands at 35 percent. The effective corporate tax rate, however, is generally much lower, as The Huffington Post has reported and New York Times columnist David Leonhardt pointed out this week.
Sessions didn't detail what sort of tradeoffs he would find acceptable, and his office didn't return an email seeking clarification.
But the Alabama Republican's suggestion that taxes be raised elsewhere in order to make corporations more comfortable was too inviting for some Democrats to ignore. The office of Senate Majority Leader Harry Reid (D-Nev.) quickly pounced, posting video of Sessions' speech on its YouTube channel.
"Today," Reid spokesman John Summers wrote in a statement, "Sen. Sessions said he wants to cut taxes for corporations, even if it means raising taxes somewhere else. So, whose taxes would Sen. Sessions raise? Does he think it's time to fund corporate giveaways on the backs of middle-class families?"
UPDATE: Stephen Miller, a spokesman for Sessions on the budget committee, sends over the following response. It's not a direct disavowal of the Senator's floor statement. But it does accuse Reid's office for twisting his words.
So let me get this straight: Senator Sessions goes to the floor for thirty minutes to explain a variety ways we can create millions of new private sector jobs--without government spending--and Democrat Leadership's apparent priority is to find a way to twist his words to fit into a scripted attack? I'm sure out-of-work Americans consider that a really constructive use of Congressional resources.