The Biden tax plan may become something worse
And it looks like the person standing on the way of higher tax rates is…Democratic Sen. Kyrsten Sinema. As the Wall Street Journal reports:
…[Sinema] continues to oppose any increase in marginal rates for businesses, high-income individuals or capital gains, according to people familiar with the matter.
Sen. Kyrsten Sinema (D., Ariz.) has previously told lobbyists that she is opposed to any increase in those rates, according to a person familiar with her remarks, but her stance is now pushing Democrats to plan more seriously for a bill that doesn’t include those major revenue increases.
That doesn’t mean her position is set in stone, or Democrats’ desire to put the screws to more taxpayers to underwrite at least a portion of their spending plans is done. Quite the contrary. Democrats as a whole and Sen. Sinema, too, are still pursuing a variety of other tax schemes. Including a wealth tax aimed, supposedly, at only the richest of the rich:
“We probably will have a wealth tax,” House Speaker Nancy Pelosi (D., Calif.) said…on CNN, noting that Senate Democrats were still working on their proposal, which isn’t technically a wealth tax but bears a strong resemblance to that idea.
The proposal under consideration from Senate Finance Committee Chairman Ron Wyden (D., Ore.) would impose an annual tax on unrealized capital gains on liquid assets held by billionaires, Treasury Secretary Janet Yellen said….
In other words, a tax on gains that are on paper, only. It’s a fundamental shift in the way government raises revenue. And if anyone thinks it will be limited to the super duper rich, they should recall the income tax was originally only going to affect the Rockefellers of the world.
But one thing to keep an eye on is the calendar. The longer the Democrats keep negotiating with themselves, the closer Congress comes to the end of the 2021 session. Democrats could get something done this year. But if they fail to do so, the odds they will raise taxes next year – in the congressional mid-terms – fall considerably.