WASHINGTON — President Joe Biden has a simple message for fellow Democrats about his plan to raise taxes to remake large parts of the American economy: Look beyond the bottom line.
Biden is trying to persuade Democrats to adopt a more emotive argument, namely that the plan is fair, that it raises taxes on those who can pay more and spends money on programs targeting children and the middle class. We do.
The president has proposed a more than $3 trillion revenue increase primarily through higher taxes for corporations and the nation’s richest families, as well as greater IRS enforcement that would target the wealthy. But key lawmakers this past week expressed doubts about the size and potential impacts on the economy as congressional committees considered the measures and a wide range of business groups sifted through the details to highlight their opposition.
Interviews with three administration officials show that the White House is comfortable settling for a lower price as part of the negotiating process, as long as the end result is the creation of a tax system that voters view as fair. Officials, who were not authorized to publicly discuss the ongoing talks and spoke on condition of anonymity, said Democrats are united on this front.
If the playbook on attracting voters sounds familiar, it was the same strategy Biden used earlier this year to bolster a bipartisan infrastructure deal.
“It’s a common thing that people agree with,” said White House deputy communications director Kate Berner. “They do not understand why companies can collect profits abroad and not pay any money in taxes. They don’t understand why the hedge fund manager pays a lower tax rate than PipeFitter. It’s something that people think is fundamentally broken.”
But in a sign of uncertainty, the administration has also been publicly silent about how little Biden is willing to go to pare down the package. The administration also finds itself grappling with interest groups that the White House sees as deliberately misrepresenting its tax plans in hopes of wiping support. Officials say claims of job losses by the US Chamber of Commerce and other groups are exaggerated and fail to consider investments in family leave, children, child care, health care and the environment they believe. That it will help the economy.
The president outlined his tax plans in his budget proposal, setting a baseline for congressional committees. But some Democratic lawmakers, including West Virginia Senator Joe Manchin, have already objected to increasing spending and taxes. Manchin quickly raised concerns about Biden’s proposal to raise the corporate income tax rate from 21% to 28%.
“If you’re going to be a leader in the world and a world superpower, you better have a competitive tax rate, period,” he said.
While Munchkin and Sen. Kirsten Cinema, D-Ariz., both voted for a budget blueprint that would allow Democrats to design a package of social programs, they have made it clear that they are looking at the proposed $3.5 trillion over 10 years. Will not support topline spending figures. .
“Establishing an artificial $3.5 trillion spending number and then reverse-engineering the partisan social preferences that should be funded is not how you make good policy,” Manchin wrote in The Wall Street Journal.
On the House side, Democrats can afford to lose only three votes and still pass the spending bill if the GOP unanimously opposes it, as expected. There have already been early signs of unrest, with Representative Stephanie Murphy, D-Fla., voting against two sections of her party’s bill during a committee hearing last week, and Rep. Ron Kind, D-Wis., joined them. Not voting on one of those votes.
“I don’t know how much we’re spending, how much we’re raising, how we’re spending some money, and how we’re raising any money,” Murphy complained.
Under Biden’s initial proposal, the change in corporate taxes would increase by about $2 trillion over a decade, of which about 70% would come from keeping the corporate rate at 28% and revising the global minimum tax on profits. An additional $755 billion would come from higher personal taxes on the wealthiest Americans, including an increase in the rate levied on profits from the sale of capital assets such as stocks or real estate.
The increase in enforcement by the IRS would result in approximately $460 billion. But a Treasury Department analysis indicated that figure would rise to $1.6 trillion over the next decade as more IRS employees were fully trained, one of the key arguments for saying the budget would be financially responsible. .
Part of the challenge for Democrats is the memory of voter backlash against Ronald Reagan nearly four decades ago against a proposed tax increase during the 1984 presidential election.
Many older Democrats and those in more conservative areas fear voters will punish them if taxes are raised too much, even as Biden and advocacy groups advance the argument that voters are now rejecting Reagan-ism and Will reward Democrats for raising taxes on companies. Rich.
“We are in a generational conflict within the Democratic Party,” said Frank Clemente, executive director of the advocacy group Americans for Tax Fairness. “We are in a very different era, and these Democrats have not caught up with the era we are in.”
American for Tax Fairness is among organizations trying to persuade Democratic lawmakers to support Biden’s tax proposals. The groups have commissioned one national election and six battlefield state elections and have prompted 97 national groups and 620 state organizations to support the plans on the basis that they are popular.
Even if business groups oppose parts of the plan, their objections can vary by industry. The Chamber of Commerce has emphasized its dislike for corporations and higher rates for capital gains, while the American Bankers Association sent a letter to lawmakers Tuesday expressing concerns about increased reporting requirements to the IRS on customers’ accounts.
The Retail Industry Leaders Association, whose members include Target, Best Buy and other major retailers, on Thursday urged Congress leaders not to raise corporate tax rates, but to boost IRS enforcement and ensure that all companies increase their tax rates. Pay at least the minimum tax before. The corporate tax rate is considered.
Melissa Murdock, vice president of the trade group, said, “We’re having a lot of meetings to educate members on this issue and to make sure they understand how rate increases will hurt retail and the contributions of all profitable companies.” The importance of ensuring
The American Petroleum Institute, the largest trade group representing the US oil and gas industry, is lobbying to roll back a proposed duty on methane emissions, which proponents argue will slow climate change and oil and gas facilities near The air quality in the located communities will improve dramatically.
The group is running a more than a million dollar advertising campaign that tells viewers about energy, “Washington wants to chart an extreme course” that can make energy more expensive and less reliable.
Bernie Sanders, a Vermont independent, talked about the full-court press re-shaping or even killing the tax hike.
“You have all the big money interests in the country fighting us day after day,” Sanders said. “At the end of the day, in my mind, what we are trying to do is to restore the confidence of the American people that their government can work for them, not just the lobbyists on Capitol Hill or the big money. for the interests of. And we are going to prevail.”
But even though trade groups focus on the individual details of a complex budget, the top proposal to finance $3.5 trillion in additional spending over the next decade remains the main obstacle. Neil Bradley, executive vice president and chief policy officer of the Chamber of Commerce, said the proposed tax increase is unprecedented, but insufficient to pay for all programs while complying with Senate rules on the budget.
“‘I’ve been doing this for 25 years,'” Bradley said. “Based on that experience, it is my belief that a package of this size collapses under its own weight.”