Negotiations have been ongoing for months now between congressional Democrats and the White House — Republicans have been notably absent — on what aspects of President Joe Biden’s “Build Back Better” agenda will ultimately be included in the budget reconciliation bill, including what sort of taxes will be added or adjusted to help pay for trillions in new spending.
According to the Daily Mail, one new proposal, misleading dubbed the “billionaire tax,” which has the backing of the White House, was reportedly scrapped just hours after first being introduced Wednesday in what is being seen by many as yet another signal that a final deal on Biden’s plan is still far out of reach.
The new proposal would essentially levy a tax on unrealized capital gains — meaning Democrats are seeking to tax wealth and assets that don’t even actually exist yet, but could potentially exist if an asset were sold for an appreciated value greater than what it was initially purchased for.
Needless to say, it’s a ludicrous idea of dubious constitutionality, so much so that even some Dems have rightly shied away from it.
Not so fast
According to Bloomberg, one of those opposed to the idea is House Ways and Means Committee Chairman Richard Neal (D-MA), who reportedly nixed the proposed tax just hours after it was introduced in the Senate by progressive Finance Committee Chairman Ron Wyden (D-OR).
Congressman Neal asserted that there was no way that the so-called “billionaire tax” on unrealized capital gains would garner sufficient approval in the House, and instead suggested an alternative of imposing an extra 3% surtax on top of the already existing top tax rate for Americans earning $10 million or more in annual income.
Wyden, however, disagreed, insisting that his proposed levy wasn’t completely dead. “Last time I looked, the United States Senate has a say, too. And so we are continuing to work with members,” Wyden said.
The sudden about-face on the proposed tax likely caught the Biden team off-guard, as White House Press Secretary Jen Psaki had just that day signaled the administration’s full support for the plan.
Asked if the proposal was even legal during Wednesday’s press briefing, Psaki laughed and replied:
We’re not going to support anything we don’t think is legal. But I will tell you the President supports the billionaire tax. He looks forward to working with Congress and Chairman Wyden to make sure the highest-income Americans pay their fair share.
She then rattled off a list of several different tax-related, revenue-raising proposals that are under consideration while downplaying the opinions of opponents to the “billionaire tax,” such as Sen. Joe Manchin (D-WV), who has proven to be a thorn in the side of Biden’s expansive spending plans.
A look ahead
Despite the incessantly positive spin from the White House regarding an impending final deal, both Bloomberg and the Daily Mail pointed out that various aspects of the spending package have been increasingly cast aside in order to find compromise between moderates and progressives on the left and reach an agreement that can pass both chambers of Congress.
What that means is that the package that was initially estimated to cost around $3.5 trillion has been whittled down to less than $2 trillion, and numerous proposals to create or expand domestic programs have been cut, rendering a final deal far from what Biden had hoped for. A major legislative failure like this one certainly isn’t how he wanted to start his presidency.