It's been a while since we've checked in on Biden's signature spending packages up on the hill. Since we last talked, the Infrastructure Bill continues to hang in the balance as a bartering chip of sorts while Democrats work out the particulars of Biden's $3.5T End All Pain and Suffering Bill that's been slashed to a $1.75T End Some Pain and Suffering Bill to meet the demands of, mostly, Krysten Sinema and Joe Manchin who stand like colossuses against the battering waves of unhinged government spending. Meanwhile, Republicans sit on the sidelines flinging feces at any idea, effectively removing themselves from influencing the bills at all.
Lawmakers hope that something will get passed before Joe Biden shows up at the COP26 Climate Conference in Glasgow at the end of this week. That seems unlikely.
Legislators seek alternative ways to enforce emissions goals. Manchin, who stands at the bottleneck, demands that any policy not punish producers for not meeting clean energy goals. As a result, Democratic lawmakers have conceived of a scheme in which grants and incentives encourage clean energy use without penalties for those who don't.
On Paid Leave
A paid leave program, initially designed to last 12 weeks but later cut to four weeks, is in danger of falling out of the bill, according to aides familiar with the talks.
On Community College
Lawmakers had also indicated the package would likely not include two years of tuition-free community college but would retain universal prekindergarten. Interestingly enough, Tennessee already offers its residents free college through its Tennessee Promise program.
On Child Tax Credits
The Child Tax Credit program — awarding families $2,000 per child under age 17 — arose as part of the $1.9T coronavirus relief bill passed earlier this year and has been struck from the butchered package now floating through the chambers. Democrat lawmakers had hoped to make the tax credit permanent or extend it for another year and then make it permanent when no one was watching.
Who Pays For It?
The highly controversial idea thrust forth by Janet Yellen suggested that taxing the rich's unrealized gains would drive a significant portion of the revenue. Figures for how much the tax would raise over 10 years range from between $250 billion and upward of $500 billion. Under that plan, Musk and Bezos would each pay $50 billion and $44 billion respectively over the first five years.
In lieu of the "new tax" which few expect to wiggle its way through the Supreme Court, lawmakers ponder:
- A 3% “surtax” on millionaires earning more than $5 million per year
- Raising the corporate tax rate to 26.5% from 21%
- Increasing the top individual rate to 39.6% from 37%.
- Increasing the top capital-gains rate to 28.8% from 23.8%
Additionally, lawmakers are also considering a 15% tax on the income of roughly 200 of the largest American companies, an initiative that Krysten Sinema has voiced support for despite her opposition to nearly all of the aforementioned rate hikes.
Joe Manchin has come out against the draconian measures to monitor all transactions in accounts with inflows and outflows greater than $10,000. Democrats sell the idea as something that would only affect the much-maligned "1%", but the initiative would fall most heavily on lower and middle class households. It is perhaps the most damning of the tax initiatives which invite government agencies deeper and deeper into citizens' lives.
Othe Things of Interest
- Bill Hagerty Calls Out Sanders for Backing Reconciliation Bill Despite Big Tech Immigration Carve Out (NRO)
- The Billionaire Tax: The Worst Tax Idea Ever? (Musings on Markets)
- Elon Musk on taxing unrealized gains (@elonmusk)
- The MAGA Case for the Infrastructure Deal (American Mind)
- The Democrat who could bring down Biden: Kyrsten Sinema embodies the end of performative radicalism (Unherd)