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Billionaire Tax Dead On Arrival After Manchin Blasts Proposal Mere Hours After Its Release

Topline

Democrats have already nixed a contentious plan to tax the wealth of roughly 700 billionaires, Rep. Richard Neal (D-Mass.) confirmed Wednesday, after moderate Sen. Joe Manchin (D-W.V.) voiced concerns earlier in the day over the proposed provision in President Joe Biden’s spending package. 

Key Facts

At a press conference Wednesday, Neal, chair of the House Ways and Means Committee, said the proposal was “out of the Biden plan” after Manchin, whose support is crucial for Democrats to pass legislation in the evenly split Senate, told reporters he didn’t like the billionaire tax. 

Manchin suggested Democrats would ultimately agree on raising taxes more broadly, saying: “I believe we will end up where everyone’s going to pay.”

The senator’s comments came less than six hours after Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, released legislative text for the proposed billionaire income tax, which would have required billionaires and Americans making more than $100 million annually to pay a long-term capital gains tax on unrealized profits. 

At a Wednesday press conference, White House Press Secretary Jen Psaki didn’t comment on Manchin’s billionaire tax doubts and instead sought to temper concerns the legislation could be struck down in court by saying it was legal.

Key Background

For months, Democrats have been working to bridge disagreements within the party about just how large their spending package—which is set to target priorities such as healthcare, childcare and education—should be, as well as how they should pay for it. Though the bill originally carried a price tag of $3.5 trillion over 10 years, one of the key holdouts, Manchin has long insisted he prefers a $1.5 trillion package. On Tuesday, however, Manchin suggested he may be willing to go higher. In addition to the billionaire tax, Democrats have proposed a new minimum corporate tax of at least 15% for companies making at least $1 billion annually and have floated broadening the requirements for taxes on investment income.

Crucial Quote 

“People in the stratosphere, rather than trying to penalize them, we ought to be pleased this country is able to produce the wealth,” Manchin said Wednesday. “But with that, there’s a patriotic duty that you should be paying something to this great country to give you the protection and the support and the opportunities… Everyone should pay their fair share.”

What To Watch For

Lawmakers are trying to finalize a deal before Biden departs for a trip to Europe on Thursday. The White on Wednesday said the timeline still seemed realistic despite Democrats’ ongoing disagreements.

Chief Critic

“It seems to me almost every sensible progressive revenue option that the president wants, that the American people want, that I want, seems to be sabotaged,” Sen. Bernie Sanders (I-Vt.) said Wednesday after Manchin’s comments. 

Further Reading

New Billionaire Wealth Tax—Targeting 700 Richest Americans—Unveiled. Here’s How The Democratic Plan Would Work. (Forbes)

Here’s How Many Billions Of Dollars America’s 20 Richest—Including Elon Musk And Jeff Bezos—Might Owe Under Proposed Billionaire Tax (Forbes)

Democrats’ Spending Plan Could Mean $20 Billion Tax Cut For The Rich—Even With A New Billionaire Tax (Forbes)

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