As the pandemic wanes, many West Virginians are looking to a brighter future. Yet our economic recovery is fragile. The state unemployment rate remains above its pre-COVID level, with tens of thousands of people still out of work.
So, it came as welcome news when after months of debate, President Biden — flanked by our own Sen. Joe Manchin — announced on June 24 that the White House and congressional leaders had reached an agreement on a bipartisan infrastructure deal. The proposed legislation would devote almost a trillion dollars to upgrade bridges, tunnels, roads, utilities and more.
Our rugged region would benefit hugely from infrastructure improvements. We have some unfortunate distinctions: The American Society of Civil Engineers recently awarded West Virginia a grade of D+ for the condition of our bridges and roads, and among all states, we have the highest percentage of bridges in poor shape, according to the American Road & Transportation Builders Association.
But while we need better infrastructure, we can’t afford a tax increase to pay for it that kicks workers and businesses in the teeth just as we’re getting back on our feet. The new, tentative agreement — which Sen. Manchin helped negotiate — avoids such a hike.
Unfortunately, though, more radical members of his party are now pushing for a second “human infrastructure” bill that’d demand more government spending — to the tune of $6 trillion. And for this go-around, corporate tax hikes would foot the bill.
While the relief packages of late have no doubt helped support our economic comeback, we can’t sustain this level of spending — particularly not on the backs of American businesses and workers. It’s up to our senior senator to prevent such economically ruinous hikes.
Some may think raising corporate taxes would only affect wealthy investors who can afford the bill. But in reality, everyone would end up paying more.
Corporations pass added expenses along to customers through higher prices or to employees in the form of lower pay, fewer benefits, layoffs or outright closures. These effects would be particularly painful for West Virginia, which already has the second-lowest per capita income and the fewest businesses per resident of any state in America.
Higher corporate taxes would also be detrimental to the nation as a whole. The rate floated by some in Washington would put us well above the global average of 23.85%, encouraging businesses to leave the United States and incentivizing investors to take their money overseas — which, counterproductively, would lower the amount of taxable revenue available here at home.
The United States used to have one of the highest corporate tax rates in the world. Then, in 2017, it was reduced to 21% to be in line with the global average — and, as hoped, the economy flourished. Unemployment fell to its lowest level in half a century. By the fall of 2019, 24 states, including West Virginia, had hit record low unemployment. Nearly 500,000 new manufacturing jobs were created.
The pandemic wiped out some of those gains. But tampering with the current tax system now would just prolong the distress for West Virginia’s struggling workers and businesses.
Happily, the new infrastructure agreement includes no corporate tax hike, instead looking to other means — like better enforcement of existing tax law and repurposing unused relief dollars — to fund the spending. This legislation would be a win for West Virginia. But the threat of a secondary bill still looms in the near future.
In a closely divided Congress, Sen. Manchin will wield critical influence over the final form of this traditional infrastructure bill — and determine whether a “human infrastructure” proposal goes anywhere.
America is beginning to heal, with more of us reopening our doors and getting back to work. It’s vital that we fix our deteriorating infrastructure and ensure America continues its economic recovery.