It’s an ambitious spending package that keeps getting smaller, as President Biden with senior Democrats work to finalize the details on how to pay for it. The latest proposal is an annual tax on unrealized capital gains reports the New York Post.
Some are calling it a wealth tax, but Treasury Secretary Janet Yellen isn’t. It’s a tax on paper profits on liquid assets held by America’s wealthiest, and one that would impact fewer than 1,000 Americans.
Janet Yellen told CNN, “I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the income of the wealthiest individuals and right now escape taxation until they are realized.”
Will the Tax Bill Reach 2 Trillion?
The spending bill has been pared down from its original $ 3.5T goals. The number $ 2T is the number that is most closely associated with it today, however even that could change. It’s not likely the bill will be $ 2 T if Senator Manchin (D-WV) and Senator Sinema (D-AZ) get their way. Senator Manchin has already sought to whittle it down to a range between $ 1.9 T and $ 2.5 T. He’s also said if it reached $ 1.75T he will sign off.
The bill is considered among the largest packages of tax hikes in decades, with a spending plan from those hikes that largely focuses on children, families, and health care.
The Spending Plan
The spending plan is expected to be a 10-year-spending bill, with children and families coming first. If passed, it will help to establish a universal Pre-K, and will expand the child tax credit. The plan also includes initiatives to make child care more affordable.
Paid family and medical leave programs are also included in the spending package. An expansion on Medicare benefits is expected, with the hopes that vision, dental, and hearing benefits will be added. All three of those initiatives are not expected to pass, but vision and hearing might.
An emphasis on children nutrition programs is also in the bill.
What is Getting Cut
Cuts are always on the table as the bill keeps getting smaller. The child tax credit duration will be cut from four years to one as it stands now.
President Biden’s climate change plan is also on tenuous ground, particularly the initiative to subsidize utility companies for cleaner energy sources. Democrats are still looking for an alternative here, however production tax credits on nuclear power and more credits for carbon sequestration are back on the table. Final issues were still being discussed as early as yesterday at President Biden’s Delaware home.
Corporate Minimum Taxes
Yesterday, with Senator Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) met with President Biden to iron out some details. The New York Post reported that the White House called it a productive discussion. Decisions from there have not been announced. A key issue with the bill includes a 15 percent corporate minimum tax. With this President Biden will require companies to pay what he has referred to as their “fair share.” In addition to unrealized gains taxes, corporations are expected to pay significantly to cover the ambitious spending bill.
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