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Politics On The Money: White House sees GOP infrastructure plan as starting point | Biden to propose capital gains tax hike

02:40  23 april  2021
02:40  23 april  2021 Source:   thehill.com

Why some of the most liberal Democrats in Congress want to bring back a tax break for the rich

  Why some of the most liberal Democrats in Congress want to bring back a tax break for the rich Democrats want to raise taxes. So why are they debating cutting them for some well-off taxpayers?In their 2017 tax bill, Republicans partially closed a tax loophole that mainly affected higher-income people in high-tax areas — i.e., relatively well-off people in blue states. They capped the state and local tax deduction (SALT) people can take when calculating their federal income tax at $10,000. People can still deduct state and local taxes from their federal tax bill, but only up to that point.

Happy Thursday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

Jen Psaki in a blue shirt: Biden press secretary Jen Psaki answers reporters' questions at the White House © Getty Images Biden press secretary Jen Psaki answers reporters' questions at the White House

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Republicans unveil $568 billion counteroffer to Biden's infrastructure plan

  Republicans unveil $568 billion counteroffer to Biden's infrastructure plan Republicans unveiled a $568 billion infrastructure framework Thursday -- their answer to President Joe Biden's far more expansive $2 trillion package. Your browser does not support this video The newly released GOP framework focuses exclusively on "core" infrastructure items like roads and bridges, broadband, airports, waterways, rails, ports and public transit. It excludes other big-ticket items in Biden's proposal, including explicit funding for electric vehicles, housing and home care. Sen.

Write us with tips, suggestions and news: slane@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.

THE BIG DEAL-White House sees GOP proposal as legitimate starting point: An elusive bipartisan breakthrough on an infrastructure deal may have gotten marginally more likely today.

Stocks drop after reports that Biden wants to double capital gains tax for wealthy

  Stocks drop after reports that Biden wants to double capital gains tax for wealthy Stocks dropped Thursday amid reports that the Biden administration will propose a large hike of the capital gains tax in order to pay for his childcare and family spending plan. © Provided by Washington Examiner The proposal would nearly double the capital gains tax for wealthy individuals from the 20% rate it is at now to 39.6%. Individuals making $1 million or more could end up paying a federal rate of up to 43.4% when an existing Obamacare surtax on investment income is included. The news, while not yet confirmed, caused stocks to drop the most in over a month, with the S&P 500 down about 0.92% at close.

  • The White House on Thursday signaled it would be open to further talks with Republican lawmakers after they proposed a significantly reduced infrastructure plan to counter President Biden's $2.3 trillion proposal.
  • Press secretary Jen Psaki told reporters the administration believes the $568 billion proposal from Senate Republicans unveiled earlier in the day is a legitimate starting point for ongoing talks.
  • She said the president would likely host lawmakers at the White House for further discussions in the coming weeks.

"It's the beginning of a discussion," Psaki said. "And the next steps will be conversations at the staff level, conversations between senior members of our administration, members of Congress, appropriate committee staff through the course of next week, and then as I noted the president will invite members down to the White House. But there are a lot of details to be discussed."

Increasing the Capital-Gains Tax — Penalizing Initiative, Enterprise, and Not Just ‘the Rich’

  Increasing the Capital-Gains Tax — Penalizing Initiative, Enterprise, and Not Just ‘the Rich’ On the menu today: the coming (maybe) capital-gains-tax disaster, a GameStop winner, Boris Johnson’s green dream, Biden’s green dream, and ‘sleepminting.’Higher Capital-Gains-Tax Rates Penalize Success, Disincentivize Business Formation, and Discourage Investment: An Unusual Formula for Growth

The Hill's Brett Samuels has more here.

The background:

  • Republicans have shot down Biden's American Jobs Plan proposal, which allocated $2.3 trillion toward roads, bridges, railways, electric vehicles, broadband, long-term care workers, weatherizing buildings and climate friendly industries.
  • They've also rejected corporate tax hikes Biden proposed to pay for it.

Instead, the GOP offer narrows down the definition of infrastructure and focuses on funding for roads and bridges, public transit systems, rail, wastewater infrastructure, airports and broadband infrastructure. They also proposed user fees for electric vehicles and repurposing unused federal spending allocated by the $1.9 trillion economic relief signed in March to cover the cost.

The reception: That the White House would be open to starting from a proposal so much smaller than its own-particularly after ignoring the GOP's counteroffer on stimulus-was a little bit surprising. Even Sen. Joe Manchin (D-W.V.), a crucial moderate wild card, has expressed comfort with several trillion in spending as long as it's paid for.

Joe Manchin urges Biden to focus on 'conventional' infrastructure

  Joe Manchin urges Biden to focus on 'conventional' infrastructure Sen. Joe Manchin of West Virginia, an influential Democrat, called for focusing on 'conventional' infrastructure and suggested splitting off parts of Joe Biden's $2.3 trillion plan.‘What we think the greatest need we have now, that can be done in a bipartisan way, is conventional infrastructure whether it's the water, sewer, roads, bridges, Internet — things that we know need to be repaired, be fixed,’ the influential West Virginia Democrat said at a press conference Friday.

But while Sen. Chris Coons (D-Del.), the heir to Biden's Senate seat, said he's down to start from there, several of his Democratic colleagues are very much not. Sen. Bob Casey (D-Pa.) dismissed the proposal as a "slap in the face" and said he refused to be "a part of any scheme that sells out our seniors. And Sen. Ron Wyden (D-Ore.) said it was "far too small" and "not a serious effort to do anything at all about the climate crisis."

Climate change? In this economy? A central focus of the Democratic infrastructure bill is, in fact, fighting climate change through the economy, which is another area of major disagreement for the parties.

That GOP criticism was on display Thursday at a Senate Banking Committee hearing, where Democrats touted the Biden administration's "whole-of-economy" approach to fighting climate change.

  • The proposal would allocate hundreds of billions of dollars toward accelerating the shift away from fossil fuels, with the goal of creating thousands of green energy jobs in the process.
  • GOP lawmakers already have blasted Biden for shutting down the Keystone XL pipeline and actively pushing the U.S. away from oil and gas.
  • Massive investments in renewable energy production, however, are a no-brainer proposal for Democrats, who see Biden's proposal as a generational chance to turn the tide against both climate change and income inequality.

I'll take you to the contentious hearing here.

Biden's capital gains tax hike to 39.6% will send rates soaring

  Biden's capital gains tax hike to 39.6% will send rates soaring President Joe Biden's proposed tax hike will cost high-earning Americans in more than a dozen states upwards of 50% on their long-term capital gains and other qualified dividends. Nearly doubling the federal capital gains rate could discourage those making more than $1 million from investing in the stock market as it’s increased from 23.8 per cent to 39.6 per cent, which would lower the GDP by 0.1 per cent and reduce federal revenue by around $124 billion over 10 years, according to the Tax Foundation.

Read more:

  • President Biden announced a new international climate finance plan on Thursday that seeks to eventually double U.S. financing for climate-related programs in developing countries and put limits on international investment in fossil fuels.
  • Climate change's toll on agriculture, global health and physical infrastructure, as well as redirected government spending, among other issues, could cause the global economy to lose 10 percent of its value by 2050, according to a study released Thursday by a global reinsurance company.

LEADING THE DAY

Biden plan would nearly double capital gains tax for wealthy: report: President Biden is reportedly preparing a proposal for a near-doubling of the capital gains tax for wealthier Americans, increasing the rate to 39.6 percent, up from the current top rate of 20 percent, according to a report in Bloomberg News.

  • The increase, in line with his campaign proposal, would impose the higher rate on those earning more than $1 million.
  • When added to a 3.8 percent surcharge on investments put in place by the Affordable Care Act, the top rate could reach 43.4 percent.
  • Additional capital gains taxes in high-tax states could push investment taxes up further for residents.

The Hill's Niv Elis breaks it down here.

Biden to propose $1.8 trillion 'families plan' with paid leave, child care, universal pre-K, free community college

  Biden to propose $1.8 trillion 'families plan' with paid leave, child care, universal pre-K, free community college The plan is the second piece of Biden's 'Build Back Better' economic agenda following the release of a $2.3 trillion infrastructure and jobs plan.Biden is set to formally introduce his American Families Plan at his first address before a joint session of Congress Wednesday night. It's the second piece of his "Build Back Better" economic agenda following the release of a $2.3 trillion infrastructure and jobs plan released earlier this month.

The timeline: Biden is expected to include the proposal as part of his American Families Plan to be presented before a joint session of Congress next week. But it's far from clear when that proposal would be introduced, when it could pass, and if it would still be that high.

White House press secretary Jen Psaki said the plans were not finalized, but that Biden believed investments in infrastructure and child care should be paid for.

"His view is that that can be on the backs of the wealthiest Americans who can afford it, and corporations and businesses who can afford it. And his view, and the view of our economic team, is that that won't have a negative impact," she said Thursday.

That was enough to cause some selling on Wall Street, however. The Dow Jones Industrial Average, S&P 500 and Nasdaq composite closed with losses of 1 percent each shortly after the report.

Weekly jobless claims hit new pandemic low of 547,000: Initial jobless claims for the week ending April 17 fell to a seasonally adjusted 547,000, a 39,000 drop from the previous week and the lowest level since pandemic lockdowns began last March. The continued drop in weekly claims is a sign of an improving labor market but also indicates how tough conditions remain.

The weekly figure is still over double the pre-pandemic level, and an emergency pandemic unemployment program for the self-employed and gig economy workers saw an uptick in filings.

Niv has more here.

Why President Joe Biden's speech to Congress was unlike any other in modern history

  Why President Joe Biden's speech to Congress was unlike any other in modern history A joint sessions speech, known for its glad-handing cadence, was bound to be subdued with only 200 folks permitted at an event that can hold 1,500.President Joe Biden's address to a joint session of Congress was unlike any in modern history due to the COVID-19 pandemic. With no more than 200 folks permitted for an event that can hold up to 1,500, an event known for its glad-handing cadence and rousing moments was destined to be subdued.

GOOD TO KNOW

  • The Biden administration is withdrawing a Trump-era proposal that sought to loosen protections for transgender homeless people.
  • Acting Federal Trade Commission (FTC) Chairwoman Rebecca Kelly Slaughter criticized the Supreme Court's unanimous decision Thursday to limit the agency's ability to secure monetary relief for consumers from companies found to engage in deceptive practices.
  • Securities and Exchange Commission (SEC) Chairman Gary Gensler's lengthy to-do list for regulating U.S. financial markets has Wall Street anxiously awaiting his first moves.
  • Liberal groups and progressives in Congress are pushing back on efforts by Democrats from high-tax states to repeal the state and local tax (SALT) deduction cap, posing a challenge as the party tries to build consensus on President Biden's infrastructure package.

ODDS AND ENDS

  • Two groups within conservative mega-donor Charles Koch's political network called on the Biden administration Thursday to release all the temporary worker visas allocated by Congress for fiscal 2021.
  • Chevron hired lobbyists to warn against sanctions on Myanmar Oil and Gas Enterprise (MOGE), which could impact the oil and gas giant's operations in Myanmar.

Why President Joe Biden's speech to Congress was unlike any other in modern history .
A joint sessions speech, known for its glad-handing cadence, was bound to be subdued with only 200 folks permitted at an event that can hold 1,500.President Joe Biden's address to a joint session of Congress was unlike any in modern history due to the COVID-19 pandemic. With no more than 200 folks permitted for an event that can hold up to 1,500, an event known for its glad-handing cadence and rousing moments was destined to be subdued.

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This is interesting!