Democrats firm up tax plans for Biden social spending bill

WASHINGTON — With only a day left before President Joe Biden leaves for a week of summits in Europe, Congressional Democrats were still in deep negotiations Wednesday on several key parts of the president’s Social Safety Net and Climate Bill.

But there has been remarkable progress on at least one issue: taxes.

On Tuesday, three Democratic senators introduced a plan to introduce a minimum tax of 15% on corporate registry income, which would only apply to companies that have reported income of more than $1 billion for three consecutive years.

The plan quickly won the approval of two major centrist Democrats in the Senate: Kirsten Sinema of Arizona and Joe Manchin of West Virginia.

However, even as Democrats coalesced around the 15% minimum corporate tax, two other proposed tax changes appeared to be headed toward the chopping block.

CNBC’s Kayla Tausche reported Wednesday, citing three sources familiar with the matter, that a plan to have banks report cash flow information to the IRS for accounts with more than $10,000 in non-wage deposits is no longer under serious consideration.

A belated plan to tax annual unrealized market gains for the wealthiest Americans — people who report more than $100 million in income or own more than $1 billion in assets — looked like shaky ground on Wednesday. Manchin told reporters he thought the plan was “complicated.”

Potential revenue sources to foot the bill received new attention this week after Sinema announced in mid-October that it would not support a long-term plan to generate revenue by raising its corporate income tax rate and the highest individual tax rate.

Democrats need all 50 senators in their caucus to pass any bill, so the cinema announcement left the party in turmoil.

But while the taxes and “payments” continued to irritate some Democratic lawmakers, questions loom over what benefits the bill would actually provide.

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Those controversies have largely centered on whether and how to preserve some of the benefits contained in Biden’s original social spending proposal, such as paid family leave and expanding Medicaid, while keeping the total bill cost below $2 trillion.

Manchin opposes many of the proposed benefits expansions, and continued to wield significant influence Wednesday over the talks.

Manchin says his opposition to expanding Medicaid and Medicare is rooted in his concern about the long-term financial viability of the two programs.

Medicaid provides health insurance to more than 75 million low-income and vulnerable Americans, while Medicare supports health care for more than 60 million individuals over the age of 65.

Manchin also opposes a popular plan to create a system to manage and fund a system of federal paid family leave for all workers.

Paid family leave was a key part of Biden’s promise during his 2020 presidential campaign, to ease the financial burden on working families.

But Manchin sees it as an additional unnecessary government feature in the bill, which raises the overall cost of the legislation.

This is a developing story, please check back for updates.

CNBC’s Kayla Tosh contributed to the report.

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