Plan B for soaking the rich
Millionaires be warned: Democrats are looking for creative ways to tax the wealthiest Americans to pay for their $1.75 trillion social safety net expansion, lawmakers and aides tell Axios.
Why it matters: The nation’s 700 billionaires may have dodged a bullet when Sen. Joe Manchin (D-W.Va.) effectively killed a plan to tax just their unrealized capital gains. But Manchin has told colleagues he's open to hitting all the country’s richest families and individuals with higher taxes.
- One idea is a new 15% minimum tax — to make up the approximately $200 to $250 billion Democrats were counting on from the billionaire tax that had been pushed by Sen. Ron Wyden (D-Ore.).
Driving the news: Even as he filleted Wyden’s billionaire tax, Manchin floated a separate “patriotic tax."
- He suggested it should prevent wealthy Americans from declaring “zero tax liability.”
- For Americans who've had “a very, very good life and have had a lot of opportunities — there should be a 15% patriotic tax,” Manchin told reporters.
What we're watching: Manchin huddled with Sen. Elizabeth Warren (D-Mass.) Wednesday afternoon to discuss ways to find additional revenue.
- “Senator Manchin believes that very wealthy people should pay taxes because it is their patriotic duty,” Warren told Axios.
- That doesn't include her own proposed “wealth tax,” which would impose a 2% fee on wealth over $50 million, and 3% for more than $1 billion.
- “That’s not where we are,” she said of her talks with Manchin. “Even so, there are ways to make certain that billionaires do not escape taxes.”
Go deeper: Democrats are engaged in a complicated negotiation among various factions in their own party about what to include in their social spending and climate plan — and how to fund it.
- A proposal to provide paid family leave was jettisoned on Wednesday afternoon in an effort to cut the price of the overall bill, but supporters insist it can survive.
- House Speaker Nancy Pelosi is moving toward a vote on the separate $1.2 trillion infrastructure package later this week and has effectively delinked the infrastructure and social spending bills.
Between the lines: One way to make the math work — and have all the new spending offset with fresh revenue — is to lower the overall price tag.
- “The top line coming down makes it easier to assemble the package and pay for it,” said Sen. Tim Kaine (D-Va.) “We’ll have a paid-for package.”
- Manchin stuck with his $1.5 trillion price tag during his meeting with President Biden on Tuesday, according to a person familiar with their conversation.
What they are saying: Senators are pleading for more time to work out the tax policy — and legislative language — in any potential deal.
- We need “to allow some of this very, very complicated tax policy an appropriate airing back and forth,” said Sen. Mark Warner (D-Va.)
- Sen. Jon Tester (D-Mont.) predicted that finding the right revenue formula would take “weeks.”
- “There's a lot of things that have been kicked off the table," he said. "I don't know how it doesn't take some time, but we’ll see.”