Democrats’ proposed billionaire tax collides with moderate resistance – News Couple

Democrats’ proposed billionaire tax collides with moderate resistance

A plan by Senate Democrats to introduce a tax targeting 700 billionaires to pay for part of President Joe Biden’s $2 trillion spending plan has sparked resistance among moderate members of the party, raising doubts about its political viability.

Ron Wyden, chairman of the Senate Finance Committee, announced the details of the proposal Wednesday, saying it would apply to taxpayers who earn more than $100 million in annual income or own more than $1 billion in assets for three consecutive years.

But within hours, prominent Democratic senators expressed concerns about the plan. Given the 50-50 split of partisan representation in the Senate, any one of them could single-handedly diminish their chances of being passed.

“I don’t like to suggest we’re targeting different people,” Joe Manchin, a Democrat from West Virginia, told reporters.

Mark Warner, a Virginia Democratic senator, said it makes sense to ensure “wealthier Americans pay a fair share,” but added that “the devil is in the details” and it’s important not to favor “one asset class over another.”

Despite the potential setback, White House press secretary Jen Psaki said it was still realistic to reach agreement on the broader package before Biden heads to Europe for the G20 summit in Italy on Thursday.

Of course he would love to head out on his trip with a deal, she said.

Wyden announced the billionaire tax plan earlier in the day, as the top tax clerk in the upper chamber of Congress scrambled to find ways to raise revenue to fund the president’s economic plans. The move represents a plan B after Democratic proposals to raise corporate and individual income tax rates were stymied by opposition from Arizona Senator Kirsten Senema.

The Billionaires Income Tax will ensure that billionaires pay taxes every year, just like working Americans. There is no working person in America who thinks it is right to pay their taxes and billionaires do not. “We have a historic opportunity with the Billionaire Income Tax to restore justice to our tax code, and fund important investments in American families.”

The plan would include treating US billionaires’ tradable assets, such as stocks, on a market price basis each year – a significant departure from their traditional treatment under US tax policy, where they are only taxed when they are sold.

But while Wyden said the billionaire tax would generate billions of dollars in revenue, it would leave the tax treatment of many of America’s richest families as is.

Wyden’s move targeting billionaires came a day after he announced a plan with Elizabeth Warren, a Democrat from Massachusetts, and Angus King from Maine, to impose minimum corporate profits taxes for 200 of America’s largest companies, in an effort to offset the possibility that Democrats won’t succeed. raising corporate income tax.

The measure would require companies that report earnings of more than $1 billion to shareholders to pay at least 15 percent in tax refunds. King later told reporters that the plan would raise between $300 billion and $400 billion in revenue over 10 years.

The changes, which would limit companies’ ability to use tax loopholes and demand deductions to reduce their tax base, are designed to offset the cost of Biden’s legislative plans to pump federal money into early childhood education, public health care and clean energy.

This plan is designed to prevent the largest US corporations from avoiding paying federal taxes. Senators cited the example of Amazon, which despite reporting $45 billion in profits over the past three years, actually paid a 4.3 percent tax rate on its profits — compared to the current corporate tax rate of 21 percent.

In an important endorsement of the proposal, Sinema issued a statement calling the planned tax changes “a logical step toward ensuring that highly profitable companies – which can sometimes avoid the current corporate tax rate – pay a reasonable minimum corporate tax on their profits.”

Sinema had previously proven to be a thorn in the Biden administration’s side when she made clear she opposed White House proposals to raise the US corporate tax rate from 21 percent to 25 percent, along with increasing individual income and capital gains. Taxes on the richest families in the country.

The White House initially proposed raising the corporate tax rate to 28 percent, in part a reversal of former President Donald Trump’s 2017 tax cuts, but subsequent negotiations on Capitol Hill initially made the 25 percent standard seem more feasible.

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