By Associated Press
“Making progress,” Sinema said as she dashed into an elevator.
A weekend deadline loomed for approving a smaller, bipartisan roads-and-bridges infrastructure bill or risk allowing funds for routine transportation programs to expire. But that $1 trillion bill has been held up by progressive lawmakers who are refusing to give their support without the bigger Biden deal.
Despite a series of deadlines, Democrats have been unable to close the deal among themselves, and Republicans overwhelmingly oppose the spending package, relegating it to passage through budget reconciliation with its pure majority requirement. At best, Democrats could potentially reach a framework Thursday that could send Biden overseas with a deal in hand and unlock the process while the final details were sewn up.
From the archives: McConnell seizes on debt standoff to undermine Biden agenda
Applying pressure, Pelosi announced a Thursday committee hearing to spur the Biden package along toward a full House vote, though timing remained uncertain.
Democrats had hoped the unveiling of the billionaires tax Wednesday could help resolve the revenue side of the equation after Sinema rejected the party’s earlier idea of reversing Trump-era tax breaks on corporations and the wealthy, those earning more than $400,000.
The new billionaires’ proposal would tax the gains of those with more than $1 billion in assets or incomes of more than $100 million over three consecutive years — fewer than 800 people — requiring them pay taxes on the gains of stocks and other tradeable assets, rather than waiting until holdings are sold.
The billionaires’ tax rate would align with the capital gains rate, now 23.8%. Democrats have said it could raise $200 billion in revenue that could help fund Biden’s package over 10 years.
Republicans have derided the billionaires’ tax as “harebrained,” and some have suggested it would face a legal challenge.
But Democratic Sen. Ron Wyden of Oregon, chairman of the Senate Finance Committee, insisted the billionaires tax remains on the table.
“I’ve not heard a single United States senator — not one — get up and say, ‘Gee, I think it’s just fun that billionaires pay little or nothing for years on end,’ ” Wyden said.
More likely in the mix was the companion proposal, a new 15% corporate minimum tax , as well as the new surtax being proposed on higher incomes above $10 million.
Together they are designed to fulfill Biden’s desire for the wealthy and big business to pay their “fair share.” They also fit his promise that no new taxes hit those earning less than $400,000 a year, or $450,000 for couples. Biden wants his package fully paid for without piling on debt.
Resolving the revenue side has been crucial, as lawmakers figure out how much money will be available to spend on the new health, child care and climate change programs in Biden’s big plan.
Among Democrats, Rep. Richard Neal of Massachusetts, the chairman of the Ways and Means Committee, said he told Wyden the billionaires’ tax may be difficult to implement. Despite Sinema’s opposition, he expects Democrats to stick with the approach his panel took in simply raising rates on corporations and the wealthy, undoing the 2017 Republican tax-code overhaul , which significantly reduced taxes on those entities while slashing the deductibility of state income and property taxes from federal taxes.
“There’s a lot of there’s a lot of angst in there over the billionaires’ tax,” Neal said.
From the archives (December 2017): Stock-buyback machine shifted into overdrive by Republican tax-code overhaul
Under the House bill approved by Neal’s panel, the top individual income tax rate would rise from 37% to 39.6%, on those earning more than $400,000 a year, or $450,000 for couples. The corporate rate would increase from 21% to 26.5%.
The House bill also proposes a 3% surtax on the wealthiest Americans with adjusted income beyond $5 million a year, and Neal suggested that could be raised to $10 million to win over the holdouts.
Opposition from the two senators is forcing difficult reductions, if not the outright elimination, of policy priorities — from child care assistance to dental, vision and hearing aid benefits for seniors.
The once hefty climate-change strategies are less punitive on polluters, as coal-state Manchin objected, focusing instead on rewarding clean energy incentives.
Said Sanders, the Vermont independent: “You got 48 out of 50 people supporting an agenda that works for the American people.”
MarketWatch contributed.
