Home TRENDING NEWS Dems’ tax-increase dreams meet election-year reality

Dems’ tax-increase dreams meet election-year reality

0

Jon Tester isn’t up for reelection this fall, nor is he threatening to oppose a party-line Democratic bill that might increase taxes. He still has a warning for his colleagues.

“I don’t think raising taxes is a winner anywhere, OK?” Tester said in an interview.

If Democrats can pass a bill that cuts the deficit and drug costs, the Montanan added, “there’s some positive things you can talk about. But the bottom line is that no, taxes are never a winner. We need to be very careful.”

As Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.) labor toward a possible summertime agreement on a filibuster-proof tax, energy and prescription drugs bill, the Democratic Party is reckoning with its long-term political position on taxes. For more than a decade, Democrats campaigned on raising rates on high earners and large corporations, arguing the GOP is the party of tax cuts for the top 1 percent.

Yet as Democrats near the climax of their monthslong push to unilaterally raise those taxes, there’s real division in the party over both how to talk about tax increases and whether to pursue them at all. Already some House moderates are balking at any tax increases in the bill, and Republicans are revving up a campaign that will hit Democrats for raising any taxes.

“I don’t think tax increases would be popular,” said Rep. Susie Lee (D-Nev.), one of the party’s most endangered House incumbents. But she added: “Let’s see what the Senate gives us.”

There’s relatively broad agreement on using any party-line bill to increase taxes on some high earning Americans who run so-called pass through businesses to pay for Medicare solvency. But Democrats are undecided on including a proposed surtax on people making more than $10 million and an increase in minimum taxes on large corporations. And Manchin says he won’t support any tax increases that aggravate inflation.

Democrats are aiming to raise $1 trillion to pay for their long-sought legislation; Medicare taxes and prescription drug reform get them roughly halfway there. They’re warmer to a 15 percent corporate minimum tax than on surtaxes on individual high earners, according to a person briefed on the discussions, but no final decision has been made. Each would raise roughly $200 billion.

The party is also considering other ways of raising revenue, including a new global tax deal and increased IRS enforcement, which is highly favored by moderates. And Democrats could reach their revenue targets even if they jettison some of the new tax increases.

Incumbent Sen. Maggie Hassan (D-N.H.) said she’s focused on lowering prescription drug costs and was noncommittal about which tax increases the bill might include: “If it were about closing loopholes for the wealthiest people and big corporations, I think that might be something the caucus will look at.”

Sen. Maggie Hassan (D-N.H.) speaks during a hearing on February 23, 2021, in Washington.

LEAVE A REPLY

Please enter your comment!
Please enter your name here