Democrats may be closing the gap on Build Back Better. After meeting with President Biden yesterday, Democrats showed some signs of narrowing their differences on a major social spending and tax bill. Biden told Democrats he’s aiming for a deal of about $1.75 trillion to $1.9 trillion, far less than the $3.5 trillion progressives wanted but still ambitious. Democrats appear to be retaining many original provisions but in scaled back form. Senate Majority Leader Chuck Schumer said he hopes to have agreement on a framework by the end of the week.
Senate Democrats soften proposed IRS reporting requirements for banks. In response to aggressive lobbying by banks and Republican pushback, key Senate Democrats are backing a much more limited plan to crack down on tax cheats. The modified plan, proposed by Finance Committee Chair Ron Wyden and Elizabeth Warren, would require financial institutions to report gross annual deposits and withdrawals only for accounts with annual deposits of more than $10,000, not $600 as originally proposed. Reporting would exclude payroll deposits and federal benefits such as Social Security.
Climate has emerged as the latest sticking point. Sen. Joe Manchin refuses to back a $150 billion clean electricity plan. He and Sen. John Tester oppose a carbon tax. White House press secretary Jen Psaki says Biden’s climate goals still could be met without the clean electricity plan.
Massachusetts state lawmaker: Let’s tax sugary drinks and double the tax on booze. Democratic State Rep. Kay Khan has introduced bills to tax sugary beverages and double the state’s excise taxes on beer, wine, and liquor. The sugar tax would range from 1 cent to 3 cents per ounce depending on the sugar content. It could generate up to $368 million to support public health, nutrition, and clean drinking water in schools. Doubling the excise tax on alcoholic beverage would generate $67 million to fund substance use treatment and prevention That levy has not changed in decades.
Tax revolt in China? The Wall Street Journal reports (paywall) that President Xi Jinping, who rarely faces any political resistance, is scaling back a plan for a national sales tax in the face of strong opposition. Xi wants the levy to slow rampant speculation in Chinese real estate. But critics say it would cause housing prices to collapse.
Ohio state lawmaker would exempt guns, ammunition, and knives from sales tax. Republican state Representative Al Cutrona says rights guaranteed under the Bill of Rights should not be taxed. He says newspapers, protected by the first amendment, are not subject to sales tax. A similar law went into effect in West Virginia on July 1.
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