House Democrats plan to tax the vast fortunes of the rich
In other areas, the committee appears to be taking only a scathing attack on the wealthiest Americans. Former President Barack Obama, Mr Trump and Mr Biden have all vowed to address so-called interest loopholes, in which private equity managers pay a reduced capital gains tax when they charge clients, saying the money is not income. Because it is derived from the investment profit of their clients.
Senate Democrats have proposed closing the loophole entirely, saving the Treasury $63 billion over 10 years. The House proposal would limit the practice only, forcing Wall Street financiers to hold on to their clients’ investment gains for five years before claiming it as capital gains and withdrawing cash. That would save $14 billion, part of a Senate proposal.
Another item missing from the House plan: a measure to do tax inheritance more aggressively. Mr Biden and many other Democrats want assets such as stocks and real estate to be taxed when they are inherited by wealthy heirs based on gains in value from the time they were purchased by the original owner. Under the current law, such assets face capital gains taxation only if they are sold, according to their value when they were inherited, Not all gains in value are allowed over the lifetime of the super-rich, as long as they are passed on to the heirs.
But the new proposal faced a fierce lobbying campaign, led by rural Democrats such as former Senator Heidi Heitkamp of North Dakota and Max Baucus of Montana. Massachusetts Representative Richard E. Neil, the Democratic chairman of the Ways and Means Committee, dropped it.
To some liberals, Mr. Neil’s pragmatism felt more like dedication.
“America’s billionaires are popping champagne tonight as the House Ways and Means Committee—led by Chair Richie Neal—fails the president, fails the country, and fails history,” said Erica Payne, President of the Patriot Millionaire, a group of wealthy liberals said. Too much tax on the rich.
Some Democrats expressed surprise at Mr Neil’s political calculations on Monday.
“A wealth tax? I don’t know anyone who says it’s not working for them politically,” said Representative Donald S. Baer Jr., Democrat from Virginia and committee member.
But with Democrat Senator Joe Manchin III of West Virginia suggesting the final package could be half the size of the House plan, Mr Baer said he understands why Democratic leaders don’t want weaker lawmakers to be the most aggressive option. Were. .
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