April 26, 2022
Senator Joe Manchin (D-W.Va.) would like to add tax rate increases on corporations and capital gains to the budget reconciliation bill that is commonly referred to as Build Back Better, according to Punchbowl News ($). But passage of the bill remains unclear.
“Manchin wants to use reconciliation for a modest rewrite of the tax code. Machin wants to hike the corporate rate from 21% to 25%, raise the capital gains tax from 23.8% to 28% and eliminate tax loopholes to make ‘sure that everyone pays their fair share, but not gouge anyone or make it punishable, if you will,’” according to the news organization.
The West Virginian Senator would also like to narrow the spending portion of the bill to prescription drugs, climate change and energy, which is expected to include tax incentives for saving energy and lowering carbon admissions.
Only half of the revenue raised by the bill would go to spending initiatives. The other half would go to paying down the debt the federal government has accumulated.
“Reconciliation to me is about getting inflation under control, paying down this debt, getting a handle on what’s going on,” Manchin told reporters, according to Punchbowl News.
This new development does mean that the Build Back Better bill is on the verge of moving forward in the Senate. (The House passed a $1.75 trillion package last year that has since stalled in the Senate because of Democratic opposition in that chamber.)
Manchin’s vision for a new Build Back Better bill is far from becoming a reality. First, Senator Kyrsten Sinema (D-Ariz.) has opposed tax rate increases and without her support the bill it will not pass the Senate. Second, the original Build Back Better legislation included social spending priorities that several congressional Democrats support. If those provisions are struck from the bill, it is not clear if they will still support the legislation.
Also, Democratic leaders have yet to publicly support how Manchin thinks the bill should be written. Until there is an agreement among Democratic leaders in Congress on how to advance Build Back Better, it is unlikely to advance toward passing the Senate.
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