Democrats change some tax rules as they prepare economic bill – Lexington-Fayette, Kentucky

Lexington-Fayette, Kentucky 2022-08-05 16:49:14 –

WASHINGTON (AP) — Democrats have cut some of the proposed minimum tax rates for big businesses and made other changes to the giant economic bill, Senate Majority Leader Chuck Schumer said Friday. domestic agenda.

Schumer, DN.Y., takes a rare peek at closed-door talks after pivotal centrist Senator Kirsten Cinema (D, Arizona) says she would otherwise vote “no” , Democrats said they had dropped plans to raise taxes on hedge fund executives. The alternative would be to impose a new tax on the stocks that companies buy back, which would generate more revenue for the government, Schumer said.

“Cinema senators said they wouldn’t vote for the bill,” or even vote to start the debate unless the private equity tax was removed from the law, Schumer told reporters. “So we had no choice.”

He spoke the day after he and cinema announced compromising amendments to the environmental, health care and tax packages. will generate revenue exceeding This includes stronger IRS tax revenues. Most of it will be used for energy, climate and health initiatives that cut the federal deficit by his $300 billion.

With the deal, Democrats are on the verge of a more modest but impressive resurgence of many of Biden’s domestic aspirations that strongly appeal to the party’s voters. They include taxing large corporations, curbing prescription drug prices, slowing climate change, allowing families to purchase private insurance, and reducing federal deficits.

In another change, Schumer said the proposed 15% minimum tax rate on mammoth corporations would be cut, raising between $313 billion and $258 billion over the next decade. The provision, which is the law’s largest source of revenue, will allow these companies to depreciate their equipment costs more quickly, reduce the government’s tax burden, and help manufacturers buy expensive machinery. can do. The new tax is expected to apply to about 150 businesses with revenues over $1 billion.

Democrats plan to have the Senate begin considering the bill on Saturday, with the House expected to return to a vote next Friday. The bill is sure to face unanimous Republican opposition in the Senate 50-50, and its passage will require the support of Cinema and all other Democrats and a tie vote from Vice President Kamala Harris. Is required.

“This bill is a game changer for working families and our economy,” Biden said at the White House.

Republicans say the bill will exacerbate voters’ biggest concern, inflation, discouraging businesses from hiring workers and raising already high energy costs through taxes.

“Pump pain will get worse, and it’s not just the cost of energy to drive a car,” said Wyoming Senator John Barrasso, the third Republican leader in the Senate. “It’s the energy that heats our homes, it’s the energy that runs the country, it’s the energy that makes electricity.”

Bipartisan analysts say the bill will have little impact on inflation and the economy.

“We feel pretty good,” Schumer said of the law.

The bill also includes the $4 billion sought by Western senators, according to Arizona Senators Mark Kelly, Nevada Rep. Catherine Cortez Mast, and Colorado Rep. Michael Bennett. It is said that The group was seeking $5 billion.

Still other changes are possible. Senator Elizabeth McDonough will soon clarify whether several provisions violate Congressional budgetary procedures and should be removed. Democrats use special rules that allow them to overcome Republican opposition and pass packages without requiring the 60 votes that most bills require.

Potentially vulnerable clauses include language requiring drug manufacturers to pay fines if patients raise the price of drugs they obtain from private insurers above inflation.

The bill faces a long weekend, which includes an unrestricted, non-stop voting “vote llama” on the amendment, which mostly comes from the Republican Party. Most are destined to lose, but Republicans want some to force Democrats to vote and fall prey to election ads.

Taxing executives of private equity firms such as hedge funds has long been a goal of progressives. Under current law, these business owners can pay well below the top 37% personal tax rate on what they call “carried interest.”

The move was also a favorite of conservative Senator Joe Manchin (DW.Va.), who has long opposed the larger version of Biden’s domestic plan that helped craft a compromise with Schumer.

But progressives also support taxing publicly traded companies that buy back their own shares, a move critics say would artificially boost stock prices and divert money away from investment. A ten-year net profit of $74 billion, well above the $13 billion available under the Carried Interest program.

In a breakthrough Thursday night, cinema agreed to the law change and said it was ready to “go ahead” with the bill. We will receive support,” he said.

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