President-elect Joe Biden
Joe BidenMissouri wife seen with Pelosi sign accused of connection to Capitol riots. Facebook temporarily bans ads for weapon accessories after the riots at Capitol Sasse, in a fiery article, says QAnon is destroying GOP MORE and Democratic lawmakers have signaled plans to raise taxes on wealthy people and businesses, but there are still significant hurdles, even with the Democratic majority in the House and Senate.
This month’s Democratic sweep in the Senate’s second rounds in Georgia, giving Democrats control of the Senate for the first time since 2014, increases the chances of tax proposals moving through Congress. However, the narrow margins in the House and Senate mean that approving tax increases will be a challenge.
“Getting them to agree on a legislative proposal will not be easy,” said Jorge Castro, a former Congressional adviser and adviser to the IRS commissioner during the Obama administration, who now works with tax law at Miller & Chevalier.
Tax proposals from the Biden campaign included reversal President Trump
Donald TrumpFacebook temporarily bans ads for weapon accessories after the riots at Sasse Capitol, in a burning opinion article, says QAnon is destroying GOP Section 230 worked on after the insurrection, but not before: How to regulate social media MOREthe 2017 tax cut law for taxpayers with an income above $ 400,000, taxing capital gains at the same rates as normal income for people with an income above $ 1 million and increasing the corporate tax rate from 21% to 28%.
Democrats generally think that wealthy people and companies are not paying enough taxes. A debate on how best to raise taxes on the rich was frontal and central during the Democratic presidential primaries, with some Democratic candidates, such as Sens. Elizabeth Warren
Elizabeth WarrenPorter loses her seat on the House panel that oversees the financial sector. NIGHT ENERGY: Nine, including former Michigan governor, is accused of water crisis in Flint | Regulator finalizes rule that forces banks to serve oil and arms companies | Trump admin adds hurdle to raise efficiency standards for ovens, DeVos water heaters pondered forgiveness of unilateral student loan while COVID-19 ruined the economy: memo MORE (D-Mass.) E Bernie Sanders
Bernie SandersSenior Democrats wary of rejecting the ‘Almost Paradise, West Virginia’ obstruction – Joe Manchin and a 50-50 Senate Biden seek a minimum wage in the COVID-19 proposal MORE (I-Vt.), Taking more aggressive positions than Biden and asking for a tax on wealth.
The chances of any tax increase on the rich increased after the Democrats won Georgia’s runoff. The victories will give Democrats and Republicans 50 seats in the Senate, with elected vice president Kamala Harris
Kamala HarrisHarris to be sworn in by Judge Sotomayor using the Thurgood Marshall Bible When invoking Trump, Nikki Haley warns of a more sinister threat On The Money: Retail sales fall at the last sign of weakening the economy | Fast-food workers strike for minimum wage | US officials raise concerns about Mexico’s handling of energy licenses MORE have the ability to break ties.
Sen. Ron Wyden
Ronald (Ron) Lee WydenSection 230 worked after the insurrection, but not before: How to regulate social media Senate Democrats are wary of preventing obstruction Night care: Biden reveals COVID-19 relief plan | Post-holiday increase sets new deadline records | Senate report on failures in the ‘broken’ system to increase insulin prices MORE (D-Ore.), The next chairman of the Senate Finance Committee that draws up taxes, said in a call with reporters on Wednesday that raising taxes on the wealthy and businesses was among his priorities.
Wyden in 2019 launched a proposal to tax the investment earnings of high-income people annually, instead of when the investments are sold. He said he plans to work more on this proposal.
“If you are a nurse in America looking after COVID patients, you cannot postpone paying your taxes. But, if you are a billionaire, you can postpone, postpone, postpone a little more and practically never pay any taxes, ”he said. “My plan would end this.”
Wyden also said he wants to reverse “corporate tax concessions” in Trump’s 2017 law, as well as cuts for those who earn the most. In addition, he said he wants to close the carry-over “gap” that benefits investment fund managers and better target the tax deduction to income from non-corporate businesses created by Trump’s law.
Biden, however, does not seem to be in a hurry to carry out his campaign proposals to increase revenue. Instead, he is focusing on immediate coronavirus relief legislation, with provisions designed to lower taxes for low- and middle-income families.
The $ 1.9 trillion coronavirus relief proposal that Biden revealed on Thursday did not include any tax increases, but would provide direct payments of $ 1,400 per person and expand earned income and child tax credits.
Biden also indicated that he is willing to increase the deficit substantially at this point.
“It’s not just that smart fiscal investments, including deficit spending, are more urgent than ever,” said Biden on Thursday. “Is that the return on these investments – in jobs, on racial equality – will avoid long-term economic damage and the benefits will far outweigh the costs.”
Biden said, however, that he plans to pay for any “permanent investments” by ensuring that the wealthy pay their “fair share” of taxes and eliminating tax incentives for companies that transfer jobs abroad. In the coming weeks, Biden is expected to present a proposal on infrastructure, manufacturing and clean energy.
When Democrats decide to move ahead with tax legislation, they may face difficulties in reaching agreement on a package that would have sufficient support to pass.
Since Democrats will control the House and Senate, they will be able to use a process called budget reconciliation that would allow them to pass fiscal and budget laws with only a simple majority in the Senate, instead of the 60 required votes. to advance accounts. Republicans used the same process to pass the 2017 tax cut law.
But the 50/50 split in the Senate means that every Democratic senator would need to support a tax increase bill to pass if no Republicans are on board. Democrats also have a minimal majority in the House.
If Democrats want to seek tax increases on the rich and companies, they will have to draft a bill that can be supported by progressives like Warren and Sanders and moderates like Sen. Joe Manchin
Joseph (Joe) ManchinSenate Democrats wary of overriding the obstruction Manchin: Hawley removal, 14th Amendment Cross ‘should be considered’ ‘Almost Heaven, West Virginia’ – Joe Manchin and a 50-50 Senate MORE (DW.Va.).
When Manchin first ran for the Senate in 2010, he said he would not raise taxes during that difficult economic period that followed the Great Recession. A spokesman for the senator did not respond to an investigation by The Hill on Thursday about Manchin’s current line of thought about potential tax increases.
Mark Mazur, a former Obama administration Treasury Department employee who is now director of the Urban-Brookings Tax Policy Center, noted that former President Obama, who had a larger Senate majority than Biden will have, started his presidency in gloomy economic times and The result delayed the reversal of tax cuts from its predecessor to the wealthy until several years after his presidency, when the economy was more advanced in its recovery.
Mazur predicted that, due to the narrow majority of Democrats, tax increases would be a “big increase”, even if lawmakers used the reconciliation process.
While there are some differences among Democrats as to how best to raise taxes on the rich, the party has joined in opposing Trump’s 2017 tax law and could find common ground to reverse tax cuts for the rich.
Indivar Dutta-Gupta, executive co-director of the Georgetown Center on Poverty and Inequality and a board member of the progressive Tax March group, said that reversing Trump’s tax cuts for high-income families is an area where there is broad consensus on the broken.
“Generally speaking, there is a lot of unity among Democrats against aspects of Trump tax law that go disproportionately to higher-income families,” he said.