Manchin and Schumer, together at last
A compromise has been reached – surprise, surprise (not) – but the details aren’t quite ironed out yet:
Sen. Joe Manchin announced Wednesday that he came to an agreement with Senate Majority Leader Chuck Schumer on a reconciliation bill, after more than a year of negotiations among Democrats…
But with Democrats grasping for a legislative win ahead of the midterms, Schumer, D-N.Y., kept up talks directly with Manchin through the spring and summer. In a lengthy statement, the moderate senator said Wednesday those talks resulted in a deal for a slimmed-down bill that includes tax, climate and prescription drug provisions…
Manchin said in his statement that the bill will have a minimum 15% tax on companies worth more than $1 billion and invests in several forms of energy, including fossil fuel, nuclear and renewables. This is on top of agreements Democrats previously came to on prescription drugs and extending subsidies included in the Affordable Care Act (ACA).
“I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions,” Manchin said…
According to Schumer’s and Manchin’s offices, the bill will raise $739 billion in revenue through IRS tax enforcement, the corporate minimum tax, IRS tax enforcement and closing the carried interest loophole. It will spend $433 billion total, they said, on energy and climate change provisions and on the ACA extension…
“Senate Democrats can change the name of Build Back Broke as many times as they want, it won’t be any less devastating to American families and small businesses,,” Sen. John Cornyn, R-Texas, said. “Raising taxes on job creators, crushing energy producers with new regulations, and stifling innovators looking for new cures will only make this recession worse, not better.”“With inflation at a 41-year high and a looming recession, Democrats want higher taxes, more government spending, and to attack American energy,” Senate GOP Conference Chair John Barrasso, R-Wyo., added. “So much for helping American families.”
Sometimes these agreements run into a glitch along the way. This one may or may not, but my guess is that it will ultimately pass, perhaps after a short hitch or two. My other guess is that if it does, it won’t gain Democrats the approval of voters that aren’t already on their side.
They (either side) always say that IRS enforcement will bring in loads of money. Yet, it never seems to happen. Of course, the IRS is all for getting money from the middle class. Climate change in the bill means again the MC will be slammed some more. Wonder what Manchin got out of the deal? We know what we got.
SHIREHOME:
It’s also kind of funny in that it assumes the IRS hasn’t been enforcing tax collection till now? What have they been doing in the meantime, besides persecuting organizations on the right?
yes they’ve been playing this game since lois lerner, helped them steal the 2012 election, by suppressing the tea party, they pretended it was because of obamas superior tech skills, bollocks
Inflation Reduction Act of 2022?
Orwell wrote about names of laws like this. The name is all you need to know.
Repealed the carried interest loophole? No way can the Senators from CT vote for that.
so did ayn rand, whatever advantage the quarter point made, this one blasted a whole clean through
https://www.youtube.com/watch?v=KecnOolcwIo
a little elmer bernstein, for fighting music
Manchin is being played by Schumer. The actual bill that will be brought up will contain all the other stuff in Build Back Better, and Manchin will be dared to walk away from it. It’s a good play by Schumer- get Manchin’s public support with the bait, then switch at the last moment.
Manchin is being played by Schumer.
Wouldn’t surprise me. Guy’s long struck me as a dishonorable swine.
The Democrats are desperate and trying to buy love. It would be funny if they weren’t taking all of us down with them.
Manchin said in his statement that the bill will have a minimum 15% tax on companies worth more than $1 billion …
… the corporate minimum tax,
Uh oh. Pop quiz: What is the current tax rate for US corps.? Answer: 21% on profits. So what the #%@*& are they talking about? A 15% tax on revenue??
Yes, it is true that many corps. pay no taxes when they have no profits. And profits can be legally manipulated. It’s not a perfect system. Just better than all the others so far. Expect a wave of bankruptcies if they actually tax revenues at 15%.
(A revenue tax of 15% would be insanely high, even for a Democrat. A tax on EBIT or something??)
Here is more on the minimum corp. tax.
In March, the administration called for a 15% minimum tax on the income corporations use to report their profits to investors, known as “book” income.
Do they mean “non-GAAP” income? GAAP meaning “generally accepted accounting principles.” I always thought that one was kind of a made-up number. (Maybe that’s the point. More Kabuki theater.)
They specifically referenced Amazon, which they said reported $45 billion in profits over the past three years, yet paid an “effective tax rate of just 4.3% – well below the 21% corporate tax rate.”
Ha ha ha. Let’s stick it to Jeff Bezos.
Is the ‘carried interest loophole’ really a loophole? The argument is that venture capitalists and private-equity partners who get paid off the ‘carry’ (typically representing 20% of the returns to investors after their initial investment in a deal is paid back) is really labor income, since it reflects the work done by the VC on behalf of the investors….and that hence, it should be taxed at ordinary income rates.
BUT…when people are taxed on ordinary income, that usually represents the compensation for labor they have performed in the current tax year and were paid for when it was performed, or shortly thereafter. Whereas the work a VC does on a deal is mostly front-end-loaded….he may spend a lot of time reviewing & filtering a range of possible deals, finally selecting a relative few of them, and then spend additional time structuring the deals. And the payback will very often be 5 years or more in the future. So he’s doing work that he won’t be compensated for for many years, if ever.
Rather different in timing from typical hourly or salaried work; I’m not so sure that the capital gains treatment of the carry is unreasonable.
Manchin said in his statement that the bill will have a minimum 15% tax on companies worth more than $1 billion . . .
Which of course will ultimately be realized as a tax on consumers. Basic economics, guys.
Irisghotter49,
I wish Manchin would be directly asked about that 15%, and why he seems to think it will slow or curb inflation.
Is he one of the idiots who deny that corporate taxes get passed on to customers??
What Yancey Ward said @8:01 pm.
The description of the “deal” in the Zerohedge article linked to below sounds like nothing that Schumer could or would ever agree to.
If this is the case, the only question is, what will Manchin do when he finds out that he’s been stiffed…
https://www.zerohedge.com/political/manchin-and-dems-reach-deal-reconciliation-package-climate-energy-tax-and-healthcare
(FWIW, my bet is that he’ll pull out, but the pressure on him not to, by the usual suspects, will be absolutely insane.)
Corporate min tax on evil oil and coal energy producers sounds like a major loser especially for the WV constituents. It might be dog track time for Manchin.
And once again, Manchin folds up like a cheap suit.
Rest assured, this new bill will not bring in anywhere near the additional revenue they proclaim. People, companies, etc., will adjust their policies to compensate.
Regardless, just remember folks; companies do not pay taxes, they collect them.
Speaking of taxes; ever notice that when you buy something, anything, the tax paid is ALWAYS a separate line item on the bill.
EXCEPT when you buy gasoline.
Geez, I wonder why that is????
For your reading pleasure and enjoyment, check out the state and federal taxes on a gallon of gasoline.
Oh, yeah, on the edge of a recession, let’s go for more tax enforcement and raising “just corporate” taxes. :-/
Idiots.
}}} For your reading pleasure and enjoyment, check out the state and federal taxes on a gallon of gasoline.
Yup, the only thing more absurd is the taxes on cigarettes (and probably alcohol, but I haven’t really looked close at those).
What is REALLY fun is that the Sales tax taxes the money paid in taxes.
Yup. You are literally paying a tax applied to the very nontrivial taxes imposed on cigarettes.
SMH…
It is profoundly interesting that schooling for at least the last 60 years has ignored the fact that the taxes the American Revolution was primarily about (and yes, they were the driving cause) totaled somewhat less than the sales tax alone applied in virtually every state.
SMH some more…
}}} }}}Manchin is being played by Schumer.
}}} Wouldn’t surprise me. Guy’s long struck me as a dishonorable swine.
TBH, he is a politician.
“Dishonorable swine” is more a question of “just how much?”, not “is he or isn’t he?”
I grant there may be occasional exceptions, but generally that’s not the way to bet, even with pretty good odds.
I note that Ted Yoho was one of the Tea Partiers voted in, who you may recall advocated strongly for term limits. Which he reneged on when in office. Not saying he was an awful rep, but that’s one promise he kinda totally forgot about once elected. :-/
Pretty sure he wasn’t the only one.
The most common argument is “there’s a reason for that tying committee membership, etc., to longevity in office.” OK, I can buy that. So start introducing bills — and getting popular support for — changes in that process to make term limits more effective…
NAWwwww.. just run again. :-S
I’m not sure this will pass and, if it does, inflation will go up right before the election. Biden is so stupid that he announced,“ Milton Friedman isn’t running the show anymore.”
Reality begs to differ.
The Progressives want more of our money. They get it by raising taxes – on corporations. Corporations don’t pay taxes; their customers pay them. Raise taxes on corporations and prices rise to pay the taxes. Tha insures more inflation. Just what we need in an inflationary recession. 🙁
Poor Joe Manchin. They have beaten him down. At least that’s the way it looks. Maybe Senator Sinema will be able to hold out. We need more senate seats. Vote like your life depends on it in November. Because it does.
The Wall St. Journal is reporting this morning that the Manchin-Schumer agreement was announced the day after seventeen Republican senators agreed to the “chip” bill. This had been held hostage against the “reconciliation” bill. With that threat out of the way, Manchin immediately agreed to his “slimmed down” reconciliation package. As the WSJ editorial board says, Republican senators got rolled.
And here’s the list:
https://www.powerlineblog.com/archives/2022/07/the-spenderama-17.php
The usual suspects, including both of my senators — one retiring, we hope to be replaced by Ted Budd, and one RINO, Thom Tillis.