Sen. Joe Manchin floats 15% 'patriotic' tax on billionaires

Sen. Joe Manchin (D-W.Va.) on Wednesday endorsed the idea of a "patriotic tax" on wealthy Americans to offset the cost of a multitrillion spending bill that would fund President Joe Biden's economic and climate agenda.

Manchin, who is central to negotiations over the size and content of the bill, told reporters that he opposes a plan to levy a so-called billionaires tax on the unrealized capital gains of the wealthiest Americans. In its place, he said a 15% minimum tax on billionaires would "be nothing we should be scorned about" and said "it doesn't harm anybody."

"That's called a patriotic tax," Manchin said.

Democrats are scrambling to wrap up negotiations on what was originally a $3.5 trillion spending bill that would've provided free two-year community college tuition, paid parental leave, universal pre-K childcare, elderly home care, Medicare and Medicaid expansion, and a host of policies related to Biden's climate agenda.

But opposition to that top line spending number from Manchin and fellow moderate Sen. Kyrsten Sinema (D-Ariz.) has forced Biden and congressional Democrats to compromise down to about $2 trillion, ditching proposals like free college and other programs progressives support.

With only a 50-50 majority, Senate Democrats need every member of their conference to be on the same page regarding the bill for it to pass. The proposed tax increases to pay for it have emerged as another sticking point in the negotiations. Sinema has opposed increasing corporate, personal, or capital gains taxes, which has left progressives arguing that a new wealth tax on billionaires is necessary to fund the bill.

On Wednesday, Sen. Ron Wyden (D-Ore.) put forward a proposal to tax individuals with net worths over $1 billion or those who reported making at least $100 million in the consecutive years 2019, 2020, and 2021. According to Axios, the tax is estimated to raise $200 to $250 billion toward paying for Biden's nearly $2 trillion plan.

The new tax would be on unrealized capital gains, in other words the value of tradable assets billionaires hold before those assets are sold and before they are counted as income.

"The Billionaires Income Tax would ensure billionaires pay tax every year, just like working Americans," Wyden said on Wednesday. "No working person in America thinks it's right that they pay their taxes and billionaires don't."

Of course, contrary to Wyden's assertion, billionaires pay taxes.

Manchin criticized Wyden's idea Wednesday, and his vote (and Sinema's) will determine whether Democrats can pass BIden's spending bill or not.

"I don't like it. I don't like the connotation that we're targeting different people," Manchin said of Wyden's proposal. "There are people that, basically, they've contributed to society, that create a lot of jobs and invest a lot of money and give a lot of philanthropic pursuits."

"But it's time that we all pull together and grow together. I believe everyone's going to pay. I believe that we will end up where everyone must participate," the West Virginia lawmaker added.

Manchin was optimistic that Democrats would create a framework for a compromise sometime this week that would assuage the concerns of progressives, who are holding up a $1 trillion bipartisan infrastructure bill in the House until the Senate reaches an agreement on Biden's multitrillion bill. He said the president will be in contact with House progressives to smooth over their concerns.

"We're basically trying to agree to a framework, and the president's been very clear," Manchin told reporters. "He'll go over to the House, and he'll basically explain to the House that [he has] a framework, but there's still an awful lot of work to be done. And we're going to have something happen, and you have to trust. The president's getting everything he has to make this happen. He's trying to meet everybody halfway."

(h/t: The Washington Examiner)