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Biden Unveils Revamped Tax, Spending Plan With New Taxes on Millionaires

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What You Need to Know

  • The package includes an additional 5% tax on incomes above $10 million and an additional 3% on incomes above $25 million.
  • Medicare expansion is excluded.
  • The Biden administration believes the package can pass Congress.

President Joe Biden Thursday was laying out for House Democrats a framework for a $1.75 trillion tax and spending package that his administration believes will pass Congress — a potential breakthrough that still hinges on support from key moderates and progressives.

The package includes a minimum tax on corporations, a tax on stock buybacks and new taxes on incomes above $10 million annually, with total revenue of an estimated $2 trillion over a decade, according to a White House fact sheet.

It’s unclear how far-reaching the agreement will be and whether enough lawmakers will sign on. Biden, who arrived at the Capitol on Thursday morning to brief the House Democratic caucus, is confident that the package has the support of all 50 Democratic senators and that it will pass the House, officials familiar with the plan said, speaking on condition of anonymity ahead of Biden’s remarks.

It’s also not clear whether House Speaker Nancy Pelosi will use the framework to get a House vote on a separate, bipartisan infrastructure package with $550 billion in new spending. Biden will call for both pieces of legislation to pass whenever they’re up for a vote, but will defer to Pelosi on the timing, the officials said.

Progressives have been holding up the vote on the infrastructure bill, which has already passed the Senate, until they see the legislative text of the larger package. Representative Ilhan Omar of Minnesota said that position hasn’t changed.

“I’m a no on infrastructure until we get the other bill,” she told reporters before heading into the meeting with Biden.

Asked as he arrived at the Capitol whether the framework will get the support of progressives, Biden said, “Yes.”

Biden is scheduled to address the public at 11:30 a.m. before leaving for the Group of 20 summit in Italy.

Provisions of the framework include:

  • A 15% minimum tax on corporate profits for firms with earnings over $1 billion reported to shareholders, and a 1% surtax on stock buybacks
  • An additional 5% tax on incomes above $10 million, as well as an additional 3% on incomes above $25 million
  • $555 billion in clean energy and climate provisions
  • Universal, free preschool for 3- and 4-year-olds, and an extension of the child tax credit through 2022

The framework also raises the possibility of immigration reform being included in the reconciliation package, but the scope isn’t clear. It forecasts a cost of $100 billion, in addition to the $1.75 trillion topline.

Among the measures excluded from the framework are a deal on expanding Medicare to include dental and vision coverage and agreements on prescription drugs or any paid family leave. There weren’t enough votes among Democrats for a prescription drug plan of sufficient scope, the officials said.

Democratic lawmakers on Wednesday were still struggling to resolve essential components including taxes, whether to expand Medicare benefits, and climate change provisions. They also have yet to determine whether a plan to provide a deportation shield for millions of undocumented immigrants complies with Senate rules governing the budget process known as reconciliation that would allow the plan to pass with just Democratic votes.

A Democratic aide familiar with the talks says that they have been told two key Democratic senators — Arizona’s Kyrsten Sinema and West Virginia’s Joe Manchin have loosely signed off on the framework but haven’t yet committed to voting for the bill and still have questions on various aspects of the package.

Representative Pramila Jayapal, a top progressive, said Thursday the framework is not enough for a vote on the infrastructure package, which progressive have been delaying until there’s a deal on the other bill. “It’s still very general right now,” she said.

Senate Budget Chairman Bernie Sanders said Wednesday night Democrats remained far apart on any deal.

“It’s not conceivable to me that we’re gonna have to deal today,” Sanders told reporters. “To my mind, there is no way. I mean, I think we got revenue issues and everything else.”

Biden wanted to have an agreement, or at least a framework of one, on his broad spending plan when he arrived for a gathering of the Group of 20 leaders in Rome, followed by the United Nations climate summit in Scotland.

Democrats hope a framework deal will allow a vote this week on a the stalled $550 billion infrastructure bill, but progressives have said they want a final budget bill before allowing the infrastructure measure to pass.

The announcement also comes just days before a gubernatorial election in Virginia, where polls show Democrat Terry McAuliffe tied with Republican Glenn Youngkin in a state Biden won by ten points. Democrats from Virginia have been pleading with the White House for more action on their agenda so they can show success ahead of the vote.

Biden campaigned with McAuliffe outside Washington on Tuesday, hoping to engage enough suburban voters to overwhelm Youngkin’s advantage in rural areas.

– With assistance from Laura Litvan, Billy House and Laura Davison.

Pictured: President Joe Biden. (Photo: Stefani Reynolds/Bloomberg)

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