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Publicly, Cinema has said nothing about the move, and her aide claims she is still reviewing it. Behind the scenes, senators have discussed at least two of the proposal’s tax provisions with Democrats, according to two people familiar with the matter.
The first is to strengthen policies that benefit managers of hedge funds, private equity and real estate, taxing much of their compensation at lower rates than most other earned income. The second would set a minimum tax on large, profitable corporations that pay nothing to the U.S. government. For both, cinema’s exact demands are unclear, but she has previously expressed some openness to minimum corporate taxes. .
Together, the two proposals, along with the bill’s other cost-saving and revenue-enhancing elements, are expected to generate approximately $739 billion in new federal funding in total. This amount is enough to offset the Democrats’ new spending on health care and climate while generating about $300 billion to pay off the deficit over the next decade.
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But major price spikes and other significant challenges that political party leaders may need to pay close attention to addressing cinema’s concerns. Republicans, meanwhile, were fiercely opposed to the bill, with many approaching cinema directly on the Senate floor late Tuesday.
Speaking to reporters earlier in the day, Manchin admitted that he and Cinema were “texting back and forth.”Two lawmakers spoke just minutes before the press conference In the Senate, Manchin knelt by the cinema and she presided over the floor.
“She will make decisions based on facts,” Manchin later said.
Cinema offices declined to comment.
For Democrats, their campaign to rethink US tax law has been difficult for more than a year.
Since winning the House, Senate and White House in 2020, President Biden and his allies have promised to roll back the tax cuts adopted under President Donald Trump in 2017. Republicans have argued that cuts were essential to boost economic growth before the coronavirus pandemic hit.
Democrats originally aimed to raise tax rates as part of the first economic package, but they also got unlucky, the nearly $2 trillion Build Back Better Act. But they eventually hit a dead end after Cinema opposed changes to personal and corporate tax levels. When Democrats withdrew the proposal last fall, seemingly securing cinema’s support, Manchin quickly voiced his opposition to the bill and its price tag. I didn’t get it.
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Last week, Senate Majority Leader Charles E. Schumer (DN.Y.) came up with a new approach with Manchin in restarting Democratic economic policy. Rather than raise the tax rate for all businesses, the two men agreed to introduce a minimum 15% tax that would apply to businesses that pay nothing. This week, Democrats described the proposal as one of fairness, citing the fact that “companies often pay lower rates than firefighters and nurses.” The Senate Finance Committee announced Tuesday.
Democrats also focused on how private equity and hedge fund managers are taxed on fees paid by their clients. Lawmakers said their plan would close the “carried interest loophole”. This would allow these investment managers to pay taxes on these fees at the much lower rate levied on capital gains rather than the rate most Americans pay on their wages.
Democrats have backed the plan in recent days, but Schumer and Manchin have worked out these tax policy contours without Cinema’s immediate input. But just like Manchin, cinema votes matter a lot. Democrats must come together if they want to pass legislation under a process known as reconciliation. This procedure will only work if all 50 Democrats and Vice President Harris unite to vote on the bill and overcome the Republican filibuster.
“We have been in touch with the Cinema Senate and have been in touch with all of our members.
The debate has plagued some Democratic aides this week. After an attempt to impose a minimum corporate tax, he believed that cinema had backed earlier attempts to impose a minimum corporate tax.
Cinema had his say in October and appeared to carefully analyze his words.and Tweetshe described it as a “common-sense step” to ensure companies pay “a reasonable minimum corporate tax on their profits,” and said she would “continue to discuss” economic issues with the White House. added.
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Meanwhile, Republicans sought to increase pressure on Cinema and her fellow Democrats. showed a plan to force the issue of
In a possible sign of their pressure campaign, Senate Republicans were seen cuddling directly with cinema on the floor of the chamber all day long. Speaking to a reporter for Senator John Thune (RS.D.), The second-ranked Republican in the House of Representatives denounced the policy as “a huge tax increase on American companies that create jobs because we all know it will be passed on to the American people.”
Tax experts have recently debated the merits of minimum tax rates, and Republican opponents could discourage companies from claiming many of the incentives in tax laws designed to encourage business investment. Many Democratic tax experts are also skeptical of the merits of such a measure, and last year when the White House was pushing for it, Treasury officials expressed concern about the idea. expressed.