Pelosi: Spending bill before infrastructure bill. Speaker Nancy Pelosi urged moderate and liberal Democrats to compromise and “embrace” the developing deal for President Biden’s social spending agenda, or Build Back Better (BBB) plan, yesterday. Her commitment to first secure that agreement before bringing the Senate-passed bipartisan infrastructure (BIF) bill to a vote on the House floor reassured the progressive wing of her caucus. But Democrats remain at odds over tax provisions of the BBB bill.
Wyden releases details of his billionaires’ income tax. The Senate Finance Committee Chair’s plan would apply to those with a net worth of $1 billion or annual income of $100 million for three prior consecutive years. The mark-to-market tax would be imposed annually on publicly-traded securities as if they were sold. Unrealized losses could be carried forward or back to offset other capital gains taxes. Profits on non-publicly traded assets would be taxed as capital gains when they are sold or transferred, or when the owner dies.
But will it even fly? Some Democrats reportedly oppose the idea. With Sen. Kyrsten Sinema rejecting tax rate increases, what else is there? Some lawmakers are revisiting the idea of an income tax surtax for very high-earners. Will that be different enough from a rate increase to satisfy Sinema?
Senate Democrats roll out book tax. Finance Committee Chair Ron Wyden, along with senators Elizabeth Warren and Angus King, released their proposed 15 percent minimum tax on the book income of about 200 corporations that report at least $1 billion in profits to shareholders. The corporations still could lower their effective book tax rate by tapping a range of tax credits for activities such as research and use of clean energy. The basic idea, initially proposed by President Biden, received renewed interest after Sen. Kyrsten Sinema rejected a corporate income tax rate hike.
Manchin opposes bank disclosure. The West Virginia senator apparently bought into claims by critics that Biden’s plan to require banks to report aggregate annual deposits and withdrawals would be an invasion of customer privacy. Manchin recounted to reporters yesterday what he told Biden about the idea: “Do you understand how messed up that is? This cannot happen. It’s screwed up.”
Will Nevada business owners pay a higher unemployment tax in January? They may have to in order to replenish the state’s unemployment fund. The state will decide by December 18 whether to raise the tax from 1.65 percent to 1.85 percent;. Prior to the pandemic, Nevada’s unemployment fund held $1.93 billion but by the end of 2020 the fund was essentially empty. Nevada borrowed federal funds to continue paying jobless benefits and used federal COVID-19 relief funds to pay back that loan.
Thirty millionaires in the United Kingdom: Tax us, please. British Finance Minister Rishi Sunak unveils the government’s budget today, and a group of 30 millionaires have urged the British government to raise taxes on them and other wealthy Brits. They say they can afford it and “the cost of recovery cannot fall on the young or on those with lower incomes.” They recommend a wealth tax to pay for pandemic recovery efforts and address the country’s income inequality.
China steps closer to a property tax. Moody’s reports that property—which is not taxed in China—accounts for three-quarters of China’s household wealth and drives about 10 percent of household income. Chinese leaders began discussing a property tax in 2003. Over the weekend, President Xi authorized China’s State Council to test a property tax for five years in unspecified regions. But the idea has generated unusual opposition in China.
Tune in at 10:30 Eastern this morning: US Energy Tax Policy and Climate Change. TPC and the Brookings Institution host experts who will examine US energy tax policy. Catherine Wolfram, deputy assistant Treasury secretary for climate and energy economics, will explain the Biden administration’s climate strategy. A panel discussion moderated by TPC’s Thornton Matheson follows, featuring Gilbert Metcalf, Carole Nakhle, Sanjay Patnaik, and Kurt Van Dender. Learn more and register here.
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