Manchin Opposes Democrats’ Bill
The Wall Street Journal reports D.C. Statehood Effort Stalls as Manchin Opposes Democrats’ Bill.
Stall is not the correct word. Dead is the correct word.
“If Congress wants to make D.C. a state, it should propose a constitutional amendment,” [West Virginia] Senator Joe Manchin, a centrist Democrat, said in a radio interview with WV Metro News. “It should propose a constitutional amendment and let the people of America vote.”
The development underscores the pivotal role Mr. Manchin plays in the Senate, where he has influenced the course of legislation this year, including the level of unemployment benefits in the most recent Covid-19 aid package. He has also expressed concern about the size of President Biden’s spending plans and his proposed tax increases.
Democrats only have a majority in the Senate if all 50 Democrat Senators vote for a bill. Then to break the tie, Vice President Kamala Harris would break the tie.
Filibuster Rules
The tie-breaking procedure only applies to budget items not foreign policy, not statehood, not immigration etc.
Otherwise, filibuster rules apply and that means 60 Senators have to agree to legislation.
Democrats have proposed killing filibuster rules, but guess what? Manchin and Kyrsten Sinema (D., Ariz.) have raised objections to such a move.
Dead on Arrival
Anything that Manchin or Sinema disagree with is dead on arrival in the Senate.
Moreover, Democrats can only afford to lose two seats in the House where there is no tie-breaking vote.
There are 25 Democrats from New York alone who will not go along with Biden’s tax proposals unless SALT is undone. SALT stands for State and Local Taxes.
Republicans under Trump eliminated SALT as a deduction from Federal taxes. High tax states like New York don’t like it.
Raise Taxes on Them Not Us!
The SALT objection highlights the problem of legislators wanting to tax everyone else but themselves or their constituencies.
Without rolling back SALT, Biden’s tax proposals will never make it out of the House. But needing all votes but two means that the effort to roll back SALT can upset at most two others.
SALT Rebellion Irony
https://twitter.com/davidsirota/status/1384472493256187912
In New York, 85% of the benefits of Dems’ proposed SALT cap repeal would flow to the top 5% of income earners, with two thirds of all benefits flowing to households making more than $1 million a year.
25 Democrat hypocrites in New York alone protest a tax hike that mostly affects those making more than $1 million a year.
Double Taxation Irony
New York Representative Jerry Nadler is leading the SALT rebellion in the House.
“No one should ever be taxed twice on the same income. It’s not fair and it’s not just,” said Nadler.
Call It a Deal!
Done, call it a deal! Let’s get rid of all double taxation items.
Dividends are taxed twice. Estates are taxed twice.
Honest Assessment
https://twitter.com/timmydemery/status/1384489411073748998
Trump Tax Cuts
I opposed the Trump tax cuts because nearly all the benefits went to the wealthy.
There were even provisions on Corp S companies in which I benefitted. But personal benefits aside, I did not feel the tax hike as structured was fair.
Give Trump Credit
Like Trump’s tax cut or not, you have to give Trump credit for the divisive SALT discussion now in play.
The SALT provision was no accident. It put Democrats in the position of wanting more taxes and less taxes at the same time.
It’s especially amusing to see Democrats moaning of double taxation.
What Else is Dead?
- Any proposal in which all 50 Democrat Senators cannot agree.
- Any proposal that loses more than 2 Democrats in the House is dead unless there are at least two Republican pickups.
- Any non-budget item that is not filibuster proof.
AOC Pleased With Biden
Biden bills himself as a moderate. He says he wants to compromise. But look at the proposals.
On April 29 I reported AOC Pleased With Biden’s Way “Better Than Expected” Progressive Push.
Socialist “Family Plan” Agenda
Biden is no moderate. And the Progressive wing would rather go down in flames than compromise.
Yet, eventually the urge to “do something” is likely to overcome Progressive inertia.
I expect some modest tax hike will pass but it will not look like Biden’s socialist $1.8 Trillion “American Family Plan”
Biden’s “American Family Plan” is misnamed. It should be relabeled “American Socialists’ Plan“.
Fortunately, the bulk of it is Dead on Arrival.
Mish
Ask every American you see, “Do you think the US Government should simplify the income tax code?” Nearly 100% will say yes. This is not a partisan issue. Get busy you lazy bunch of entitled electeds and simplify the tax code.
Everyone wants this until they find out that they will lose their loopholes or deductions. We all want stuff and don’t want to pay for it.
Exactly why Reagan eliminated many, many pet deductions and social engineering incentives in exchange for lower marginal rates across the board. Broaden the tax based, reduce loopholes. Sounds like you’re a Reaganite?
Nadler: “No one should ever be taxed twice on the same income. It’s not fair and it’s not just.”
Nadler has a new narrative.
what about lowering the medicare eligibility age to 50?
I agree with you Mish, 100%
I did not like the overall proposal. Yet, I believe the ideal corporate tax rate should be 0%. I do not think 0% can apply to sole proprietorships however.
In general, taxes are too high, but spending is outrageous. The bill massively increased the deficits and the Republican deficit hawks are a bunch of hypocrites.
We seriously need reform, and although I benefitted from 199A, I do not think the combined result of the bill was fair to most of the middle class.
One cannot discuss these provisions in isolation as you asked, but yes, it was helpful.
I would like a complete overhaul, tax simplification, and an end to all itemized deductions coupled with reining in military and other spending.
Thanks for your frank reply, Mish. I agree that an overhaul is necessary; I would prefer a consumption tax instead, though. Of course, I’d favor reining in military spending, though the military-industrial-congressional complex makes that nearly impossible: Remember how during the early 1999s even the most liberal Democratic representatives fought tooth & nail against base closures in their districts?
I respectfully disagree that one cannot discuss the TCJA provisions in isolation; we’ve had multiple discussions here on your website about the $10,000 cap on SALT, for example. Section 199A certainly benefitted many in the middle class, including myself, who are self-employed. If there are particular parts of the TCJA that you believe were unfair to the middle class, I’d like to know which ones. I may come to the conclusion that the TCJA is good overall, with deficiencies, but I wouldn’t necessarily fault your reasoning to the contrary.
The moment we get “simplification” the former Congresscritters, now lobbyists, would start the carve-out contributions for their clients.
You do have to like the strategy. Go big on everything and then try to compromise at a level way to your advantage than would have been considered before. If the R’s can’t get a bipartisan consensus they are going to be painted as obstructionist on kitchen table issues. Pound the fact that million dollar earners through capital gains are being taxed at half the rate you are. Don’t let up. Though he may be a bit daft the politics are fine.
Exactly. Re: SALT, one thing that is now being talked about in some circles is to limit the SALT deduction but raise the limit from 10K to 15K or 20K or 24K etc. That idea could gain momentum in the coming days and weeks.
Raising/eliminating SALT is essentially just subsidizing real estate investment over stocks/businesses. SALT is the one tax that truly affects the wealthy and not the poor so it’s actually really good that it was eliminated (even though I personally would benefit from it).
If capital gains is really going to be raised to crazy levels that Biden wants then SALT should be left in so that real estate isn’t favored over stocks. Or let the first 10/24K capital gains per year go untaxed so it equals the SALT deduction.
SALT applies only to primary residence, not to investment property, right? A primary residence is not necessarily a real estate investment. Also, I am OK with letting the first 10K – 24K of capital gains going untaxed.
In another complication I’ve seen proposals to restore the SALT deduction but limit the benefit to 18, or 20 cents on the dollar. Normally, people in the 37% bracket would see a 37c tax benefit.
I think that would be a good thing for all itemized deductions. It would still be a benefit to the wealthy (only $44k-$50k in SALT would be equal to the standard deduction, which is basically just property taxes in Westchester). The bigger policy issue is biden has promised no one making under $400k would see their taxes increased, which would be hard to do for all taxpayers.
SALT should never have been allowed. It is an abomination and penalises responsible states and municipalities and favors the irresponsible ones. It’s theft of Federal taxes.
SALT probably traces its origin back to WWII when the Federal income tax topped out at about 94%. Without a SALT deduction total income taxes could have topped out at over 100% for some tax payers.
Actually, the SALT deduction existed within the Revenue Act of 1862, which was passed by Congress to fund the Union war effort. When the income tax returned in 1913 after the 16th Amendment was adopted, the SALT deduction was included. Of course, this doesn’t mean that the SALT deduction is a good idea: IMHO, it subsidizes high-tax state & local governments.
The bluest states have been subsidizing the others for decades. State and local taxes with SALT deduction in place actually help make sure the federal government doesn’t redistribute money to states who are takers. It allows states to keep more of their own contribution.
The problem is that SALT is also subsidizing real estate investment with the deduction. The government should not be in the business of subsidizing any investment. That is the ideal behind changing capital gains to be taxed the same as income.
If you are going to raise capital gains tax, you definitely don’t want to bring back SALT.
How the federal/state government split up tax revenue is something they need to be addressing separately.
That is a fallacy. As with a balance sheet, the devil is in the details. Democrats like to use percentage of state budgets coming from the Federal government to prove their point but that erroneous. Looking at the actual amount of money from Federal intergovernmental grants per person (the money the Federal government actually sends to the states) we see that Red states get $1,879 per habitant while Blue states get $2,125. If we dig down deeper we see that this beneficiaries of these Federal government subsidies are overwhelmingly Democrat enclaves within the Red states. There is more to say about this fallacy.
Hi Doug, how are you…. seems like we are preaching in the desert, there s just the two of us here this morning……Have a nice day !
You too. It’s a cold springtime this year.
Two Europeans preaching about America’s tax policy. You dont even live here.
I am American by the way.
You married a French woman and thus are no longer American since you dont live here. I’m more American than you and I’m an immigrant and citizen and actually didn’t leave America.
You said ” I’m more American than you and I’m an immigrant and citizen and actually didn’t leave America.”.
No your not. Not even close.
You are dead to me as a citizen because you don’t live in America. Enjoy your croissants in France.
See the link above from wallet hub. That counts everything.
Your link just says it can’t load and that I should send them my email so they can give me the link to see the site. That I will not do for obvious reasons. Come up with another link that works or set out your arguments here.
Your inability to get to free links isnt my problem. The article is dated 2021.
Your inability to make arguments on your own is not my problem either. Upbraiding me for living overseas is a low blow. My wife of over 45 years lived with me in the States for years so it’s only fair that I live with her in her home country for a few years. That you find that disqualifying for whatever says a lot of what type of person you are.
But the truth is you don’t live here anymore. While you are somewhat impacted by tax laws on US Citizens, you aren’t to the degree that I or others that live in the US are. In fact one could argue that a non-citizen greencard holder living in the US is more impacted by US tax law than a citizen like you living overseas.
FWIW, I had zero trouble clicking on this link even after clearing my browser cache. No email address needed. Which shows something else on your part. The link includes all federal payments to states for both government and individuals. It turns out based on 2020 presidential election results, blue states are about 33% less dependent than red states. If we go by who controls state legislatures or governerships, it is worse for Republican controlled states. Going by 2020 presidential election numbers and calling states like Georgia and Arizona as Democratic controlled is a joke.
Mish, did you oppose the Section 199A deduction specifically? I ask because — IMHO — that was the most helpful part of the TCJA.