Massachusetts Democrat says House tax hike bill ‘looks better every day’
A top House Democrat casts doubt on a new Senate plan do The proposal could be too complicated to implement, arguing that the unrealized capital gains of billionaires and other ultrahigh earners.
The proposal, which Senate Finance Speaker Ron Wyden, D-Ore., is slated to unveil later this week, would reduce the income tax of so-called billionaires to $1 billion in income, or $100 million over three consecutive years. will be set on an income of more than that. Democrats expect the tax to generate at least $200 billion in new revenue over the next decade, which will include stocks as well as other assets such as real estate, bonds and art. Individuals can claim a deduction for the annual loss in the value of their property.
But the chairman of the tax-writing Ways and Means Committee, Rep. Richard Neal, said Monday that he told Wyden during a discussion that the senator’s administration of the proposed billionaire’s tax is “a little more challenging.”
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Neal, D-Mass., suggested the House tax-raising bill—which reversed the bulk of Republicans’ 2017 Tax Cuts and Jobs Act—was more straightforward and easier to adopt.
Under that measure, the top personal income tax rate would increase from 37% to 39.6% for married couples who report taxable income of more than $450,000 and for individuals who report more than $400,000. The corporate tax rate will increase from 21% to 26.5% for businesses earning more than $5 million. The bill also included a 3% surcharge on personal income above 5% and increased the top tax rate for capital gains — proceeds from selling assets — from 20% to 25%.
Although the House proposal was in line with President Biden’s initial tax strategy to fund his signature economy spending plan, Democrats had to reconsider their various revenue raisers after a prominent Democrat, Sen. objected to higher taxes. Well-off corporations and wealthy Americans. With the lowest possible Senate majority, the Democrats had no votes to vote.
Still, despite cinema’s disapproval, Neil indicated that the House measure was not a complete shutdown.
“Our plan looks better every day,” he told reporters.
With Neil’s pushback, it is unclear whether the billionaire tax, which would be the first of its size and scope in an advanced economy, would be supported by every Senate Democrat and nearly every House Democrat—the threshold required for its passage.
Democrats say the tax would affect about 700 taxpayers, or about 0.0002% of the richest Americans.
Elizabeth Warren, D-Mass., told MSNBC on Sunday: “Raising the rate won’t make Jeff Bezos pay a penny more.” Warren has pushed for taxing the wealthiest Americans for years, pushing a far more elaborate plan during his 2020 presidential campaign. “What we need is a tax that focuses on the wealth of the richest Americans.”
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Critics, including tax groups such as Republicans and the National Taxpayers Union, have taxed billionaires’ unrealized capital gains, arguing it would add more bureaucracy to an already bloated tax system and hurt business investors.
Democratic leaders have set an October 31 deadline to reach an agreement on a spending plan and a separate $1.2 trillion bipartisan infrastructure deal. While it is unclear what the final tax and spending proposal could look like, it is expected to be significantly smaller than the original proposal released by the White House. Biden has discussed with Democrats a topline figure that would be somewhere between $1.7 trillion and $1.9 trillion.
Democrats have just a few legislative weeks to negotiate and pass a spending bill in both chambers in addition to an infrastructure bill, which Biden is critical of for his campaign that pledges to work across the aisle. But the party will also be grappling with the threat of two imminent crises: a government shutdown and debt default.
“We need to get this done,” Biden said Monday during remarks at the New Jersey Transit Center.