Key House Democrat skeptical of billionaire tax, calls it ‘difficult’ to implement
A top House Democrat questioned a new Senate plan to tax the unrealized capital gains of billionaires and other very high incomes, arguing that the proposal could be too complicated to implement.
The proposal, which Senate Finance Chairman Ron Wyden, D-Ore., Is expected to unveil later this week, would set the income tax of billionaires at $ 1 billion in revenue, or three consecutive years of revenue from $ 100 million or more. Democrats hope to generate at least $ 200 billion in new revenue over the next decade from the tax, which would include stocks as well as other assets such as real estate, bonds and art. Individuals could claim deductions for annual losses in the value of their assets.
But Representative Richard Neal, chairman of the Tax Drafting Ways and Means Committee, said on Monday that he told Wyden during a discussion that the billionaire’s tax administration proposed by the senator was “a bit more difficult”.
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Neal, D-Mass., Suggested that the House Tax Raise Bill – which overturned most of the Republicans Tax Cuts and Jobs Act of 2017 – was more simple and easier to adopt.
Under this measure, the top tax rate would drop to 39.6%, compared to 37% for married couples who report taxable income over $ 450,000 and for individuals who report over $ 400,000. . The corporate tax rate would rise to 26.5%, compared to 21% for companies earning more than $ 5 million in revenue. The bill also provided for a 3% surtax on individual income above 5% and increased the maximum tax rate on capital gains – the proceeds from the sale of an asset – to 25%, from 20%. %.
While the House proposal is more in line with President Biden’s original tax strategy to fund his economic spending plan, Democrats had to rethink their various sources of revenue after a key Democrat, Senator Kyrsten Sinema, D- Ariz., Opposed higher taxes for affluent corporations and wealthy Americans. With the thinnest possible Senate majority, Democrats had no voice to spare.
Yet despite Synema’s rejections, Neal hinted that the House’s measure was not entirely ruled out.
“Our plan is improving every day,” he told reporters.
With Neal’s hindsight, it’s not clear whether the billionaire tax, which would be the first of its size and reach in an advanced economy, will be supported by all Senate Democrats and nearly all House Democrats – the threshold required for its adoption.
Democrats say the tax would affect about 700 taxpayers, or about 0.0002% of richest Americans.
“The rate hike will not make Jeff Bezos pay a dime more,” Senator Elizabeth Warren, D-Mass, told MSNBC on Sunday. Warren has been pushing for a tax on the richest Americans for years, rolling out a much larger plan during his 2020 presidential campaign. “What we need is a tax that focuses on wealth of the richest Americans. “
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Critics, including Republicans and tax groups such as the National Taxpayers Union, slammed a tax on unrealized capital gains from billionaires, arguing it would add more bureaucracy to the already bloated tax system and hurt investors commercial.
Democratic leaders have set a deadline of Oct. 31 to reach an agreement on the spending plan and a separate bipartisan $ 1.2 trillion infrastructure deal. While it’s not clear what the final tax and expense proposal might look like, it is expected to be significantly smaller than the original one proposed by the White House. Biden discussed revenue with Democrats that would be between $ 1.7 trillion and $ 1.9 trillion.
Democrats have only a few legislative weeks to negotiate and pass a spending bill in both houses in addition to the infrastructure bill that Biden sees as essential to his campaign pledge to work across the country. the aisle. But the party will also juggle the threat of two looming crises: a government shutdown and debt default.
“We have to get there,” Biden said Monday during an address at a transit center in New Jersey.