CrimsonPhantom
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RE: America: On the Threshold of Socialism
Update on Democrat Negotiations Shows a Party in Chaos
Quote:While some Democrats have tried to put on a happy face and assert a deal is close, the reality of the negotiations going on around the reconciliation bill paints a different picture. While there may have been a little progress with Joe Manchin over the weekend, Kyrsten Sinema appears to be nowhere in the picture.
Yet, even regarding Manchin, does this sound like a man whose about to hand the left all their wildest dreams?
It’s certainly something to see a sitting senator admit he’s “totally out of sync” with almost every other member of his party. And while The Washington Post proclaimed yesterday that a deal was “coalescing” on Biden’s agenda, complete with a smiling picture of the president, I see no evidence of that at all. Manchin has recently stated that they are nowhere close, and that appears to still be the case.
I do find it interesting that he speaks of “surviving.” Perhaps he’s just talking about the immense harassment he’s received from the left, but he also could be talking about the political line he’s trying to toe. Being from West Virginia, nothing would be better for Manchin than Democrats getting zero. But being a Democrat, he’s desperately tried to provide them with a lifeline by offering a deal. The progressives have remained as stubborn as ever, though.
On that topic, Steny Hoyer, the number 2 person in the Democrat House poured cold water on claims of leverage from the Bernie Sanders wing.
CNN’s Manu Raju is having the progressives whisper sweet nothings into his ear about the blockage of the infrastructure bill and their demands to pass reconciliation at the same time. But as Hoyer points out, what exactly was effective about that play? The answer is nothing. All it did was harden Sinema and Manchin, who felt they had negotiated the infrastructure deal in good faith. Now, Jayapal and others want to try to hold it hostage. But you can’t hold something hostage that doesn’t mean much to the other side. As I said, Manchin would be fine with nothing, and I suspect Sinema isn’t far behind.
In the end, these comments on negotiations show a party in chaos. Their coalition has crumbled, and those that have no leverage refuse to admit that reality. That’s a recipe for stalemate, and that’s exactly what we are currently seeing. The idea that a deal gets done before the end of the month, which is the White House’s goal, is probably a fantasy at this point.
Democrats retreat on spending after failing to get votes for huge tax hikes
Quote:President Joe Biden and progressive Democrats have failed to get the votes for a proposed major overhaul of the tax code and are now being forced to cut the size and scope of their planned infrastructure and social welfare legislative package as well.
Earlier this year, the Biden administration and congressional Democrats presented an ambitious agenda to claw back the 2017 GOP tax cuts and add new levies designed to help finance a planned $3.5 trillion partisan bill. Since the early summer, though, those plans have been pared back or discarded because of opposition from centrist senators who hold the keys to passing any form of reconciliation package.
Democratic Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia have been flexing their outsize power to reduce the tax burden imposed as part of the package. The party can’t afford to lose either senator’s support, given that the Senate is split 50-50 and that Vice President Kamala Harris would act as a tiebreaker on any legislation the GOP opposed as a whole.
Sinema, in particular, has reportedly opposed increases in individual and corporate tax rates, measures that Democrats were counting on to offset the bulk of their spending proposals.
Instead, Democrats, in the past few days, have discussed new measures of raising revenue, including a tax on the unrealized capital gains of billionaires.
This is a big departure from the party’s previous goal of clawing in revenue by taxing a wider swath of the wealthy, those making above $400,000 annually. Instead, this tax on billionaires would likely only target fewer than 1,000 people, according to the Wall Street Journal.
The tax, though, would only raise a small amount of revenue relative to the Democrats' spending ambitions. Democrats are now hoping that it and the other tax proposals still in consideration, such as raising taxes on corporations' foreign subsidiaries and stepping up IRS enforcement, might raise around $1.5 trillion. Manchin has said he supports spending around that sum.
Such a downsizing would force Democrats to significantly scale back or eliminate some of the biggest provisions in the bill. In recent days they have reportedly weighed dropping a proposal to expand Medicare benefits as well as a plan for guaranteed paid family and medical leave.
The notion of taxing the unrealized gains of billionaires has been discussed for years. The proposal expected to be discussed in relation to the current spending package is being led by Senate Finance Chairman Ron Wyden, who has yet to release the actual text of the plan. It would likely target those with $1 billion in wealth or those bringing in at least $100 million in income for three consecutive years.
A Finance Committee spokesperson told the Washington Examiner that the new tax would only apply to tradable assets, such as stocks, and not nontradable ones such as real estate or closely held companies.
“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Secretary of the Treasury Janet Yellen said over the weekend .
Exact details about how much revenue such a tax on unrealized gains would raise have not yet been released, although House Speaker Nancy Pelosi said on Sunday that could net between $200 billion and $250 billion over a decade.
A senior policy analyst at the Tax Foundation said that, while the group has not yet finalized an estimate on how much the proposal will bring in, a ballpark estimate would be somewhere between $200 billion and $400 billion over the next 10 years.
Sinema is also reportedly open to a 15% minimum tax on the foreign earnings corporations, which would be designed to crack down on the use of tax breaks that some businesses have been using to achieve lower effective tax rates.
The Tax Foundation found that current changes to international taxation as included in the House version of the legislation would raise about $136 billion in a decade, although that might be a bit lower if the corporate rate remains at 21%. The tax group modeled other options that could generate interest that could raise as much as $550 billion over a 10-year period.
Democrats additionally want to provide the IRS $80 billion over a decade and give it more authority, which the administration claims would raise $700 billion over the next decade. Republicans see that number as dubious and fear giving the IRS more power .
Despite the hurdles, Biden has expressed optimism that Democrats will end up agreeing to a workable package that all of the factions of the party will end up voting for.
"What we're trying to do is reach a point here where I'm able to present to the Senate, they're able to vote on, and the House a serious, serious piece of legislation that changes the dynamic for working-class folks in America and middle-class folks and begins to have the very wealthy and corporations just begin to pay their fair share," the president recently said.
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It May Shock You to Know the Democrats Lied When They Promised Not Raise Taxes on the Poor
Quote:Despite all the promises (and dresses!) about taxing the rich and the vows that the poor will not see a penny of tax increases, the Democrats are going full steam ahead with rolling out a pretty significant tax increase on the poorest 20 percent of Americans.
President Joe Biden has pledged not to raise taxes on anyone making less than $400k, but when you look at the data provided by the left-leaning Institute on Taxation and Economic Policy, their own data shows a bigger tax burden on the lowest income earners in America when it comes cigarette and tobacco tax increases. In the Democrats’ tax plan, there is a 1700% hike in the federal tobacco/nicotine tax that is supposed to raise about $100 billion in new revenue.
ITEP’s data shows that will be a bigger tax burden on the low-income earners far more than it would affect the higher income earners.
![[Image: unnamed.png]](https://redstate.com/wp-content/uploads/media/2021/10/unnamed.png)
Detractors will likely tell you that is all but negated by the Child Tax Credit and Earned Income Tax Credit expansions. But those are seen once a year. The numbers are bigger and more noticeable then, but it’s a killer on a more regular basis for the tobacco taxes that will be paid at the register for the bottom 20 percent, especially in the midst of a potential recession that features high inflation, high gas prices, and regular supply chain failures and shortages.
But this isn’t just about the bottom 20 percent (or the rest of the population that earns under $400,000 per year). This will have a major impact on farmers, which is why Kentucky Governor Andy Beshear has already come out strongly against this. Consider also the tight race for Governor in Virginia, which is the largest tobacco-producing state in the country. It’s also the home of tobacco giant Altria, which will probably lay off a bunch of people if the tax hike goes through.
If that’s not enough for the Democrats, organized labor is coming out pretty hard against this particular tax hike, as well. There’s one group, the union representing workers at a unionized Swedish Match (not-big-tobacco-tobacco-company) factory in Kentucky, that reportedly is in tight with the AFL-CIO – a group I am pretty sure the Democrats don’t want to upset, especially given how split union households were in 2016.
Something else to be considered here: Taxing nicotine doesn’t actually prevent harmful behavior, according to the Tax Foundation.
Taxing based on nicotine content would favor low-nicotine liquids and could encourage increased consumption in the quantity of liquid. For instance, a vapor pod that has a nicotine content of 3 percent and contains 1 ml of liquid would be taxed at $1.67 whereas a vapor pod that has a nicotine content of 5 percent and also contains 1 ml of liquid would be taxed at $2.78 even if there is no difference, or even a negative differential, in broader health effects of the two pods.
For those reasons, using nicotine as a proxy is not a desirable structure. Moreover, nicotine content alone does not determine nicotine absorption since absorption depends on delivery method. For instance, differences in electronic cigarette device design have significant implications for how much nicotine is absorbed by the consumer. In addition to variations among electronic cigarettes, other, and vastly distinct, nicotine products exist. However, due to the flawed definition of nicotine products in the bill, nicotine pouches, a relatively novel product which is consumed similarly to snus or dipping tobacco, will be taxed at very high rates. The high rate is a result of tax being levied on milligrams of nicotine since nicotine pouches contain more of it. Absorption through the mouth is slower than through the lungs, so these products require higher nicotine contents to satisfy consumers. Importantly, higher nicotine content does not translate to higher absorption.
What’s strange is that while smoking is routinely considered the most harmful way to consume tobacco, as the Tax Foundation points out, but it is the least-impacted by the tax hikes proposed by the Democrats. It’s almost as if they are trying to maximize the harm of cigarettes and tobacco products.
Taxing as a means of influencing behavior is not a successful strategy, and it renders the promise not to raise taxes on those earning under $400,000 a year a lie. The Democrats are so hell-bent on raising taxes before a potential loss in 2022 that they seem to be ignoring many factors within their own base that could negatively impact their electoral chances, all for the sake of raising more money for government – money that won’t even come close to making up what will be spent by their own legislation.
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