Skip to main content
Publish date:

Oops, Manchin Now Denounces the Democrats’ Wealth Tax On Billionaires

Democrats need to go back to the drawing board as Manchin has second thoughts on billionaire tax scheme.
Author:
Manchin Has Second Thoughts

Second Thoughts? 

On October 25, Fortune reported Manchin said to support wealth tax to fund Biden’s big spending package

I recall similar statements in numerous other media outlets. Perhaps the reports were false or perhaps Manchin had second thoughts possibly due to concerns over the legality of the idea. 

Manchin Now Denounces the Democrats’ Wealth Tax On Billionaires

Regardless, of why, Manchin now says Billionaires' Tax is Divisive

The billionaires tax, officially unveiled early Wednesday morning, may have died before the ink was dry on its 107-page text. Mr. Manchin, speaking with reporters, said, “I don’t like the connotation that we’re targeting different people.” People, he added, that “contributed to society” and “create a lot of jobs and invest a lot of money and give a lot to philanthropic pursuits.” “It’s time that we all pull together and row together,” he said.

The proposed tax would almost certainly face court challenges, but given the blockade on more conventional tax rate increases imposed by Senator Kyrsten Sinema of Arizona, Democrats have few other options for financing their domestic agenda. Finance Committee aides expressed surprise at Mr. Manchin’s position, insisting that he had expressed at least mild support to the committee’s chairman, Senator Ron Wyden, Democrat of Oregon.

For people like the Facebook founder Mark Zuckerberg, the Amazon founder Jeff Bezos and the Tesla founder Elon Musk, that hit would be enormous, since the initial value of their stocks was zero. They would have five years to pay that sum.

The plan already faced resistance from some House Democrats who worry that it may not be feasible and could be vulnerable to legal and constitutional challenges. 

Surprise, Surprise, Surprise

No one can possibly be more surprised than House Speaker Nancy Pelosi. 

We probably will have a wealth tax,” House Speaker Nancy Pelosi (D., Calif.) said Sunday on CNN.

Unconstitutional Measure

I covered the constitutionality of the idea at great length in a series of posts, the latest being Digging Further Into the Question "Is Taxing Unrealized Gains Constitutional?"

My conclusion: Prior Supreme court cases indicate the measure is likely unconstitutional. 

However, Senator, especially Elizabeth Warren "just don't give a damn when the constitution gets in the way of their own personal preference to have an illegal wealth tax."

My Comment

Elon Musk Comment

"Eventually, they run out of other people’s money and then they come for you."

Back to the Drawing Board

So now, it's back to the drawing board. Democrats have a self-imposed deadline of October 31 for a reconciliation bill.

RECOMMENDED ARTICLES

Before that, they had deadlines of September 30 and September 1. 

Meanwhile I note the following.

  • No Agreement on Amount
  • No Agreement on Taxes
  • No Agreement on Climate 
  • No Agreement on Duration 

Also note that Senator Kyrsten Sinema approves a wealth tax but not a hike in corporate taxes while Manchin supports a corporate tax hike but much smaller than Biden wants.

Warren Seeks "Corporate Alternative Minimum Tax" of 15% On About 200 Companies

Finally, please note that Senator Elizabeth Warren seeks "Corporate Alternative Minimum Tax" of 15% On About 200 Companies.

How does a tax that targets 200 technology companies jive with Manchin's statement “I don’t like the connotation that we’re targeting different people.”

Well, it doesn't.

Second Thoughts on Second Thoughts

The tag team of Manchin and Sinema have managed to kill every Democrat proposal to date. Is it remotely possible this is on purpose? 

Regardless, Manchin clearly does not fit in, and I have the perfect solution. 

Dear Joe, Quit the Party

Manchin threatens to leave the party. Or does he? Here are the rumors and denials.

Senator Joe Manchin Threatens to Leave the Democratic Party, Then Denies It

Thanks for Tuning In!

Like these reports? If so, please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen.

Read the ones you like and you can unsubscribe at any time.If you have subscribed and do not get email alerts, please check your spam folder.

Mish