Joe Biden promises to attack the wealthiest Americans with higher taxes to fund trillions of dollars in social spending while keeping the benefits of US fiscal policy away from Wall Street I entered the White House.
But as Congressional negotiations on Biden’s tax bill enter the final stages, influential Democrats from the president’s own party try to crush them, the US financial sector and some of the wealthiest households. Tells you the potential relief for.
Biden’s tax hike tactics at Capitol Hill occur when Democrats are jumping into the most difficult stages of their efforts to pass the president’s signature economic package. $ 3.5 trillion expansion Investing in education, childcare healthcare and green energy.
It requires senior lawmakers and their staff to translate lofty aspirations into concrete texts, under strong pressure from lobbyists and with high political interests in both the White House and Democratic members. It is a stage.
This week, Massachusetts Democrat and key tax writer in the House of Representatives Richard Neal announced a $ 2.9 trillion tax increase plan to fund Biden’s $ 3.5 trillion package, eventually his. It sheds light on the intent and specific details within the potential party. compromise.
Neil’s proposal includes raising the maximum personal income tax rate from 37% to 39.6%, but more aggressively taxing capital gains, the source of millionaires and millionaires’ huge wealth. I avoid targeting to.
Biden wants to increase Capital gains tax From 20 percent to 39.6 percent, storm incentives will end compared to income. But Neil’s plan will raise it to just 25 percent.
Neil also does not require the White House to tax unrealized capital gains in excess of $ 1 million at the time of death. While his plans strengthen the tax incentives for “carry interest,” a major source of income for private-equity fund executives, they do not eliminate them altogether.
“Frankly, this is a humiliating descent from the administration’s stance,” said James Lucier, an analyst at Capital Alpha Partners in Washington. “This avoids most of what Wall Street is worried about.”
White House officials praised Neil’s plan as a step in the complex political process of passing Biden’s spending plan without Republican support, and only the most democratic majority in both Houses.
Biden has proposed a different structure, but Democrats in the House of Representatives still meet the basic goal of increasing taxes that businesses and Americans earn more than $ 400,000 a year, they say.
In addition, many rounds of negotiations are still ahead between both the White House and Senate Democrats. There, Ron Wyden, Oregon, the Senate’s top tax writer is more progressive than Neil.
Nonetheless, Biden’s tax change proposed in the House highlights the degree of backlash among Democratic donors, lobbyists, and members who opposed the president’s efforts on wealth taxes, especially capital gains. ..
Many Democrats in urban and suburban areas of New York, New Jersey, and California have been wary of the most punchy tax increases for the wealthy. They have already called on the White House to lift the caps imposed by Donald Trump on state and local tax breaks that primarily benefit the rich.
But vulnerable Democrats in key Swing districts across the country are worried about Biden’s tax system, fearing it will hurt family businesses, including farms, and make it easier for Republicans to label the party as radical. increase.
“Neil’s most mainstream Democrats are willing to raise taxes, but chasing unrealized wealth is not their main goal. The value they have when they have to keep their seats. It’s not a fight that they think there is [in the 2022 midterm elections]”Ben Koltun, Head of Policy Research at Beacon Policy Advisors in Washington, said.
“They don’t want to take more medicine than they need to get the goods,” he added.
Neil has proposed an additional 3% tax on income over $ 5 million. This is an alternative way to attack the ultra-rich and nod to the party’s progressive wings, but it is still seen as inadequate on the left side.
“The Neil project really fails to properly tax wealth and the transfer of wealth,” said Nico Luciani, director of corporate strength at the Roosevelt Institute.
Not taxing capital gains at the time of death “is equivalent to regaining inequality and bifurcating it,” Luciani said. “It’s the same dynasty that is very divided in our economy. We maintain our wealth. “
Many liberal lawmakers demanded a full-fledged wealth tax, but Biden didn’t want to go that far.
On the corporate side, Neil couldn’t accept Weiden’s plan to impose an additional tax on stocks on Friday. Buy back By the largest companies.House Democratic Party suggestion The corporate income tax rate has been raised from 21% to 26.5%, below the 28% level expected by the White House.
However, despite some differences from Biden’s plan, Democrats do not expect Neil’s plan to gain significant traction with Republicans and corporate groups.
After being announced this week, many blamed it, and Neil Bradley of the US Chamber of Commerce called it “an existential threat to America’s fragile economic recovery and future prosperity.”
Some Washington observers predict that tax provisions may be further reduced as negotiations progress.
“The fact that Democrats have tried to move the tax system in a more modest direction implicitly admits that politics is far more tricky than they allow,” said Republican strategist Ken Spain. Stated.
“Tax increases always sound great on paper, but when it comes to doing so, it’s a much more complicated task. People start to understand how it affects them. And it will be like a live ammunition exercise. “
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“Humiliating Mountaineering”: Centrist Democrats Oppose Biden’s Tax Increase
Source link “Humiliating Mountaineering”: Centrist Democrats Oppose Biden’s Tax Increase