President Joe Biden’s push to ramp up taxes on the wealthy is getting diluted by his Democratic allies in Congress, undermining his chances of fully delivering on his 2020 campaign pledge to curb America’s widening inequality.
A blueprint that the House Ways and Means Committee will begin voting on Tuesday, prepared by Democratic members and staff of the panel, scaled back some of the most ambitious elements of the Biden administration’s pitch released in May.
The changes reflect the political reality of a Senate that requires moderate Democrats to vote en masse for the final package, given the razor thin margins of the party’s control of the chamber. The cost: support from progressives needed to fire up the electoral base in 2022, and a more concerted effort to address inequality that evidence shows is damaging the U.S. economy.
Biden’s move to tax rich families on inherited assets at the time of transfer -- ending the so-called step-up in basis measure -- is absent from the House plan unveiled Monday. His top capital gains tax rate of 39.6% gets weakened to 25%. There is a 3% surtax on incomes exceeding $5 million, but the principle of bringing levies on investments more into line with wage-earners’ incomes is eroded.
While Senate Finance Committee Chairman Ron Wyden hinted at addressing step-up in basis, such a gesture faces opposition from moderate Democrats in the upper chamber. Farm-state lawmakers have voiced particular concern about doing away with tax-free transfers of inherited assets, even though family farms were specifically marked out as an exception by Biden.https://www.bloomberg.com/news/articles/2021-09-14/biden-s-allies-shy-from-taxing-rich-eroding-inequality-promise