While inflation surges, Democrats want to revive ‘Build Back Better’ and raise your taxes
This just in — Democrats are involved in negotiations that would revive the seemingly dead “Build Back Better” plan, or at least some parts of it. According to new reports,
Thus far, they’ve reached an agreement on a proposal aimed at lowering prescription drug costs, but are still working through more contentious climate and tax policies.
Lawmakers officially submitted the prescription drugs plan to the Senate parliamentarian for review last week, and are poised to unveil additional pieces of the bill in the coming days. Recently, they inked a deal on a tax proposal that would apply an additional tax to the income high earners bring in from pass-through businesses. They’re still discussing other potential changes to tax and climate policy, however, including whether to alter corporate taxation rules, and how to levy fees on methane producers.
Will the bill pass? Supposedly, they are trying to do this the easy way out; i.e., use the reconciliation process.
This still-nascent package is Democrats’ latest attempt at advancing a bill via the budget reconciliation process, which enables policies that affect taxes and spending to pass with 51 votes in the Senate, rather than the 60 needed if a bill is filibustered under normal rules. Democrats hope to use this approach to approve more ambitious policies on prescription drugs, taxes, and climate than they’d be able to if they needed Republican support.
Up until this point, Democrats’ biggest obstacle has been disagreement within their own caucus, including Sens. Joe Manchin (D-WV) and Kyrsten Sinema’s (D-AZ) opposition to previous versions of Build Back Better. This time around, Senate Majority Leader Chuck Schumer has been negotiating directly with Manchin on key provisions, though it’s not yet clear where Sinema stands on some of the remaining issues.
As the midterms approach, Democrats are scrambling to vote on this streamlined version of Build Back Better as soon as the end of July in order to show voters that they can get results, and to capitalize on their House and Senate majorities while they still can. If the party loses either chamber in November’s elections, passing new climate and social spending through reconciliation will be all but impossible.
Taxes will go up
According to Vox, Dems are yet to finalize their tax proposals, but they have agreed on one proposal “which would levy a 3.8 percent tax on income people make via a pass-through business, if they’re bringing in more than $400,000 a year.” This proposal is projected to raise $200 billion over a decade.
The majority of U.S. businesses are pass-throughs, which means this proposal will likely have far-reaching impacts, not only on businesses but on consumers as well. As research has shown time and time again, it is consumers and workers who mainly pay business taxes.
So if this bill passes, get ready to not only worry about inflation, but higher taxes as well.