You are currently viewing Manchin Sinks Biden’s Tax, Climate, and Social Spending Agenda

Manchin Sinks Biden’s Tax, Climate, and Social Spending Agenda

President Biden’s domestic agenda upended, Sen. Manchin says no to new taxes, climate package. Negotiations continue, but last night Sen. Joe Manchin told Democratic leaders that he would not support new spending on social programs, climate initiatives, or tax increases on wealthy individuals or corporations. Democrats need Manchin’s support for a party-line vote in the 50/50 Senate since no Republicans will support the measure. Manchin says he remains open to lowering prescription drug costs for seniors and extending Affordable Care Act health insurance subsidies.

Next week: A possible Senate vote on the semi-conductor bill. Majority Leader Chuck Schumer says the bill that provides up to $54 billion in assistance to the domestic semi-conductor manufacturing industry, including a tax credit for manufacturers, could hit the floor as early as Tuesday. But GOP leader Mitch McConnell has vowed the kill the bill that includes many other provisions aimed at helping US business compete with China if Democrats continue their efforts to pass a social spending, climate, and tax bill by party-line vote.  

Who would pay the expanded Net Investment Income Tax?  Senate Democrats are mulling a House-passed bill to expand the 3.8 percent NIIT to include active pass-through income from businesses such as S Corporations and limited partnerships. Critics say the plan would hurt small, family-owned businesses. But a new Tax Policy Center analysis finds that households making $1 million-a-year or more would pay 85 percent of the expanded tax. The new tax would apply only to those making $400,000 or more. TPC’s Howard Gleckman explains here.   

Senate Democrats: Extend CTC deadlines for taxpayers without Social Security numbers. The group of lawmakers says IRS processing delays have prevented numerous families from using their Individual Taxpayer Identification Numbers (ITINs) to claim the Child Tax Credit. The senators urged the IRS to extend until Oct 15 the filing deadline for those who applied for new or renewed ITINs before April 15 but have yet to receive them. 

Can machine learning improve tax enforcement without human teachers? TPC’s Janet Holtzblatt reviews the potential for the IRS to use machine learning to improve enforcement and compliance. Brookings Institution’s Alex Engler and Janet prepared a primer on machine learning, explaining how computers can absorb and analyze more data than conventional approaches. But Janet concludes machines need experienced and skilled IRS staff to program them and review their work.

IRS gives more beneficiaries more time to shield assets from estate tax. The Wall Street Journal reports (paywall) that new IRS rules allow a surviving spouse an additional two years to file an estate tax return, for a total of five years. Many families were missing the filing deadline. The change can help spouses manage the paperwork and sets them up for potentially considerable tax savings if they choose to carry over the deceased’s unused estate tax exclusion.

Poll: People like foundations, but not tax breaks for donors. The Institute for Policy Studies commissioned an Ipsos poll that shows some public support for charity reform. The online survey of about 1000 US adults conducted last month finds that 82 percent support the idea of charitable foundations, but 81 percent do not support taxpayer subsidies for wealthy individuals who create permanent private foundations.

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].

Source link

Leave a Reply