House Democrats have proposed hiking the corporate tax rate from 21% to 26.5%, boosting the top individual rate from 37% to 39.6%, and increasing the top capital gains tax rate from 23.8% to 28.8%%. Nope, nope, and nope, Sinema says. That takes hundreds of billions out of the mix for the reconciliation bill, severely curtailing what can be passed—politically, that is. Because in actual reality, the money would be there at $6 trillion for this package—which it deserves—if the political will to do it were there.
The country isn’t “going broke,” and there don’t have to be “pay-fors” for making sure Americans have decent lives. If Congress can give the Pentagon $24 billion more than it even asked for in next year’s budget, they can afford to give all the children in the country free preschool.
Since our Congress is operating under the theory that everything but defense spending and tax cuts have to be paid for, they are now scrambling to deal with Sinema and her demands. Rep. Richard Neal and Sen. Ron Wyden, the committee chairs responsible for the revenue side of this bill, talked Wednesday with Biden administration officials to come up with some other options, CNN reports. “Treasury Secretary Janet Yellen and Brian Deese, the director of Biden’s National Economic Council, were among those who participated in the call from the administration, the people said.”
White House Press Secretary Jen Psaki told reporters that Biden is still intending to include a hike to the corporate tax rate. “He thinks that is not only fair but is long overdue,” Psaki said, adding that it is “clear where he stands.” In the meantime, they have to try to figure out what Sinema might not block. Psaki said that “there are a range of components on tax fairness that are in the package, including the global minimum tax, something that we have led the world on,” and that there are “other components in the tax fairness elements that the president is excited about” other than raising the corporate rate.
That could include taxing stock buybacks, revising international tax provisions, or a tax on the assets of billionaires. Whether or not Sinema would go along with any of this is not clear to anyone because Sinema is not talking to her colleagues. She is only speaking with the White House, supposedly. And lobbyists. Because of course she’s not going to stop talking to lobbyists.
Once they’ve trimmed another several hundred billion out and not raised anyone’s taxes to keep Sinema on board, expect Manchin to present his next set of demands. Maybe he’ll want to put children to work sweeping chimneys in exchange for their school lunches.