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Biden’s tax hikes are changing as Democrats fight competitive pressure

WASHINGTON – The deadline for filing taxes for millions of Americans is Monday, but members of Congress are nowhere near reaching a resolution on what to do about the serious tax increase requested by President Joe Biden.

Democrats – who have slim majorities in Congress – are still deciding how to deal with rival intra-party demands and the threat of Republicans’ relentless opposition to new taxes to pay for the president’s proposed infrastructure plan.

Biden runs on two tracks. He highlights the high popularity of his tax increases on corporations and people who earn more than $ 400,000 from polls in an attempt to win support in Congress.

But he is also negotiating with Republicans for a thinner package of roads and bridges, which would be a bipartisan victory, but will likely have to come without tax increases to fund them.

The president looks set to try both: to adopt a narrow bipartisan infrastructure deal, then a separate Democrat-only package that raises taxes and funds clean energy programs as well as care for adults and children.

But bilateral talks have so far distracted Democrats from imposing a resolution on the lack of points among their own members, including how much to raise taxes and how to deal with regional demands by lifting the $ 1

0,000 SALT deduction limit on government and local taxes.

Dan Rubin, a former senior adviser to House Ways and Means chairman Richard Neal, Massachusetts, said Democrats have a long way to go.

“Not only is there no consensus among Democrats in Congress, there is no consensus in the city center,” Rubin said. “You have [Treasury Secretary Janet] Yellen tells Biden: Spend, it won’t hurt. You have others who say no, no, no, it will hurt – long-term effect. You have the political piece like [Sen. Joe] Manchin. You have guys from New York who say, “NO SALT, no deal.”

Democratic strategists predicting a political attack on Republicans are also assessing the impact of tax increases on the country’s richest on their hopes of retaining control of Congress after the 2022 election.

House Majority Jim Cliburn, DS.C., said in an interview that Democrats had “received votes in the House” to adopt Biden’s spending plans – his $ 2.25 trillion infrastructure and jobs proposal and his $ 2.25 trillion program. expanding the security network by $ 1.8 trillion. families.

But they are far from a consensus on the tax side.

“I think we should pay as much as we can,” Neil said in an interview Thursday.

He would not offer a dollar amount when asked if the House should aim for $ 1 trillion, or $ 2 trillion, or more revenue.

“Good experience,” Neil said.

Progressives such as the Republic of Alexandria Ocasio-Cortes, DN.Y., rejected the need to pay for the plans and said raising taxes on the rich and corporations must be pursued to address inequality.

Moderates like Manchin, DW.Va., say pay is essential. And others say price should be a factor in macroeconomic effects.

“We need to show fiscal responsibility and we need to be able to pay for it,” said Elisa Slotkin, Michigan, a swing neighborhood that includes the suburbs of Detroit. She said funding mechanisms could be stretched for many years, “but we need to show our math.”

Price uncertainty and political differences

Rubin, now a senior director at communications firm Glen Echo Group, said he would be surprised if Democrats could agree on more than $ 1 trillion in new taxes.

“I don’t see it as much as people think. Members speak widely while they actually have to vote, “he said, adding that Democrats in the House have been willing to demand pay in recent years.

“You will be shocked at how many of our internal meetings have been spent debating whether or not our bills should be paid,” he said. “Well, a good part of our members would say, ‘I’m not going to vote for you, even though it’s a great bill because it’s not paid. “

Representative Brendan Boyle, D-Pa., A member of Ways and Means, argues that infrastructure costs have a “proven return on investment” that must be taken into account in the price.

“I don’t believe everything has to be ‘paid for,'” he said.

Although most Democrats are in no hurry to support or oppose Biden’s tax proposals, some political differences have emerged.

Not all Democrats are on board with Biden’s call to raise corporate taxes from 21 percent to 28 percent, which would be a major source of revenue. Manchin said he supported 25 percent.

Others oppose his pressure to tax capital gains as ordinary income. Others, such as Sen. Mark Warner of Washington, disagree with Biden’s objection to consumer charges.

And a faction of Democrats in states like New York and New Jersey are pushing for every tax package to lift the 2017 SALT limit, which taxed mostly the rich but hit middle-income incomes in high-income areas like Long Island. and the suburbs of New Jersey.

“The only red line for me is SALT,” said spokesman Thomas Swansea, DN.Y. “If you’re going to change the tax code, you need to fix SALT. No SALT, no deal. “

“People who make $ 150,000 where I live are middle class,” he said.

Expanding state tax deductions would counteract the Democrats’ goal of raising revenues. But party leaders cannot afford to lose the votes of Suozzi and his allies. Assistants discussed changes that do not require eliminating the restriction, such as raising and doubling for couples.

“These will be ongoing negotiations between now and the finish line,” Swansea said.

Financial Senate President Ron Wyden, D-Ore., Said it was “extremely important” for Democrats to push for new taxes as a matter of “justice” in their home states and districts.

“We have all these urgent needs: roads, bridges, childcare,” he said. Americans “understand that after the pandemic, there is a real role for the activist government. You have to find a way to make sure you have the resources, “he added. “That makes it so important.”

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