Billionaire Tax Takes Shape As Dems Rework $2 Trillion Biden Plan

WASHINGTON, DC — Conservative West Virginia Democratic Sen. Joe Manchin, who holds a pivotal vote on President Joe Biden’s scaled-back social services and climate change package, has reportedly agreed to tax hikes on billionaires and certain corporations.

Biden said Monday he felt “very positive” about reaching agreement on his big domestic policy bill, whittled from $3.5 trillion to $1.75 trillion, as he aims for a vote yet this week in Congress. Biden still wants a $2 trillion package, a difficult goal to accomplish with opposition from Republicans and no votes to spare the evenly split 50-50 Senate.

"That's my hope," he said before leaving his home state of Delaware for a trip to New Jersey to highlight the child care proposals in the package and his infrastructure measure.

Vice President Kamala Harris, who holds a tie-breaking vote in the Senate, also was confident a deal is within reach. On a visit to New York City, Harris said tensions may rise as the final details are hammered out, but she is "not only optimistic, but ... confident that we will reach a deal."

Manchin and another Democrat, Arizona Sen. Kyrsten Sinema, have slowed down the Biden administration’s signature domestic plan. Sinema objected to her party's plan to undo the Trump-era tax cuts on those earning $400,000 or more a year, and also opposed lifting the 21 percent corporate tax rate.

To win over Sinema and others, the latest idea floated by the White House would keep the corporate tax rate intact, but the top individual tax rate would go from 37 percent to 39.6 percent for those earning $400,000, or $450,000 for married couples.

The White House also is reviving the idea of a minimum corporate tax rate, similar to the 15 percent rate Biden had proposed this year. That’s even for companies that say they had no taxable income — a frequent target of Biden, who complains they pay “zero” in taxes. Hammering on a populist theme, Biden has called on the wealthiest Americans and corporations to pay a "fair share" and for the closing of loopholes that allow some to escape taxation.

The "billionaires' tax," as the proposal is called, is modeled after a 2019 bill proposed by Sen. Ron Wyden of Oregon that would have treated assets as income. Affecting fewer than 1,000 people, it would require those with assets of more than $1 billion, or three-years consecutive income of $100 million, to pay taxes on the gains of stocks and other tradeable assets, rather than waiting until holdings are sold.

A similar billionaire's tax would be applied to non-tradeable assets, including real estate, but it would be deferred with the tax not assessed until the asset was sold. Overall, the billionaires' tax rate has not been set, but it is expected to be at least the 20 percent capital gains rate.

Once Democrats decide how to pay for the package, they'll assess how much money is available to expand health care, child care and climate change programs.

Disputes remain over far-reaching investments, including plans to expand Medicare coverage with dental, vision and hearing aid benefits for seniors; child care assistance; and free pre-kindergarten.

Biden and Senate Majority Leader Chuck Schumer of New York huddled with Manchin at Biden’s Delaware residence over the weekend to resolve disputes between centrists and progressives that have stalled the plan.

The meeting came after Democrats failed to meet a deadline to resolve disputes. Democrats insist new taxes on the very wealthy will pay for the new spending, which makes big investments in health care, child care and strategies to tackle climate change.

Even in its scaled-down form, the Biden administration’s signature domestic initiative would be larger than any other legislative package.

“It is less than what was projected to begin with, but it’s still bigger than anything we have ever done in terms of addressing the needs of America’s working families,” House Speaker Nancy Pelosi said Sunday on CNN’s “State of the Union."

Democrats also face a Sunday deadline to pass a related $1 trillion bipartisan infrastructure package of roads, broadband and other public work items before routine federal transportation funds expire.

“We need to get this done,” Biden said in remarks at a New Jersey transit center.

The Associated Press contributed reporting.