Senate Finance Committee Democrats are looking at several tax options for paying for their social-spending bill that have not been previously proposed by the White House, including taxes on stock buybacks and materials used to make single-use plastics, according to a document obtained by The Hill.
The document comes as Democrats are in the process of crafting legislation that is expected to include up to $3.5 trillion in spending and tax cuts in areas such as child care, health care and clean energy. Democrats want to offset the cost of the bill through tax increases on wealthy individuals and corporations.
It remains to be seen how many of the revenue-raising items listed in the document ultimately end up in the spending bill.
The Finance Committee is considering a number of ways to raise revenue to pay for the spending bill. Some of these are similar to proposals the Biden administration has offered, including those to raise the top individual rate and the corporate tax rate.
Other options that the panel is looking at were not part of President Biden’s set of proposals and will need to be developed further before being included in any legislation. The document floats corporate tax changes that include an excise tax on stock buybacks and an excise tax on corporations with CEO pay that greatly exceeds the pay of the company’s average worker. The list also includes energy-tax proposals, such as a tax on the sale of virgin plastic that is used to make single-use plastics, as well as several possibilities for carbon pricing that would be paired with rebates for low-income taxpayers.
Some options for raising revenue in the document are based on the priorities of Senate Finance Committee Chairman Ron Wyden (D-Ore.). For example, the list includes a bill Wyden released in July that would overhaul a 20-percent deduction for income from noncorporate businesses that was created by Republicans’ 2017 tax law. The document also calls for taxing billionaires’ investment gains annually, an idea Wyden has championed for the past couple of years.
Like Biden, Finance Committee Democrats are considering taxing capital gains at death, but lawmakers are looking at more generous exemptions than the administration has floated.
Biden has called for an exemption of $1 million per person, and his proposal would not require taxes to be paid on the appreciation of family-owned businesses and farms until they are sold or stop being family-owned and operated. Finance Committee Democrats floated in their list a general exemption of $5 million per person, and are also looking an exemption of $25 million per couple for farm property.