COMPASS: Democrats prepare massive tax hike; conservatives respond to vaccine mandate

September 13th, 2021

Good afternoon from Capitol Hill.

The Senate is back this week in a run-up to a considerable series of deadlines, including passage of their $3.5 trillion reconciliation legislation. Over the weekend, House Democrats circulated a draft plan outlining some of the plan’s $2.9 trillion in tax hikes, many of which undo the Trump tax plan of four years ago:

  • Increases the top tax rate on Americans earning over $435,000 from 37 percent to 39.6 percent.
  • Raises the corporate tax rate on businesses with income above $5 million from 21 percent to 26.5 percent; businesses with less than $400,000 revenue would see their tax rate cut to 18 percent
  • Increases the capital gains rate from 20 to 25 percent
  • Changes what qualifies as investment income, making the effective capital gains rate 28.3 percent
  • Imposes a 3 percent surtax on Americans earning more than $5 million
  • Increases taxes on tobacco and nicotine
  • Measures aimed at preventing firms from artificially shifting profits abroad to tax havens

However, Sen. Joe Manchin continues to reiterate his opposition to the $3.5 trillion measure, and says he’d prefer to settle on a cost ranging from $1 trillion to $1.5 trillion. Budget Chairman Bernie Sanders (I-Vt.), the lead architect of the plan in the Senate, called anything short of $3.5 trillion “absolutely not acceptable to me.”

If that wasn’t enough to get your blood moving today, Congress still needs to come up with a plan to fund the government by September 30, and raise the debt ceiling at the same time. That’s the funny thing about deadlines in Washington. Everybody knows about them, but no one ever does anything until the last minute, because the only leverage that means anything anymore is the ability to play hot potato with self-made political crises.

Meanwhile, conservatives are responding to Biden’s announcement last week that OSHA will issue a new rule mandating vaccines or weekly COVID testing on businesses with over 100 employees. Senator Josh Hawley (R-Mo.) immediately issued a letter demanding answers from the Department of Labor, calling the mandate “unlawful.” Rep. Andy Biggs (R-Ariz.), the chairman of the House Freedom Caucus, announced he will introduce legislation to block the mandate. America First Legal issued a joint statement with former White House chief of staff Mark Meadows, vowing to “fight back, hold him accountable, and protect individual rights against these unlawful mandates.”

 

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One More Thing…

Secretary of State Tony Blinken appears before the House Foreign Affairs Committee today at 2pm. You can watch here.