The Hill: Tax hikes take center stage in Ways and Means markup

The House Ways and Means Committee on Tuesday is holding the third day of its markup of key portions of Democrats’ $3.5 trillion social spending package.

Tax provisions are expected to be front and center during the remainder of the markup.

Late Friday, committee Chairman Richard Neal (D-Mass.) released legislation on the child tax credit, infrastructure financing and energy tax credits. Then on Monday, he released legislation that would increase taxes on high-income individuals and corporations in an effort to offset the cost of spending and tax cuts elsewhere in the package.

Tuesday will be the first time that many lawmakers will be speaking publicly about the tax-increase proposals, which have generated pushback both from conservatives and progressive groups.

Bookmark this page for live coverage of the markup on Tuesday. It begins at 9 a.m.

Republicans start offering amendments

1:43 p.m.

Republicans are starting to offer amendments to the portion of the bill that Democrats are debating today, seeking to highlight portions of the bill that they particularly dislike.

Rep. Tom Reed (R-N.Y.) offered the first amendment, which would have removed a provision in the bill that modifies a tax on private colleges’ endowments created by Republicans’ 2017 tax law.

Reed argued that Democrats’ provision would lead to increased college costs, and would benefit “the wealthiest of wealthiest, especially in the Ivy League arena.”

But Democrats criticized the amendment, saying the endowment provision in the bill encourages colleges to use funds to provide financial assistance to students.

Democrats’ provision rewards “those universities that are doing the right thing,” said Rep. Brendan Boyle (D-Pa.).

The amendment failed on a party-line vote of 25-17.

The second amendment, from Rep. Ron Estes (R-Kan.), would have eliminated the entire section of the bill focused on renewable energy tax incentives.

Republicans argued that the energy provisions would lead to increased gas prices and would waste taxpayer dollars. But Democrats argued that the provisions would create jobs and combat climate change.

This amendment also failed by a party-line vote of 25-17.

GOP lawmakers are expected to offer numerous amendments to the bill on Tuesday and Wednesday, but none of them are expected to be adopted.

— Naomi Jagoda

Progressive Democrat presses for further tax increases on multinationals

11:15 a.m. 

Rep. Lloyd Doggett (D-Texas) said that the bill should do more to increase taxes on multinational corporations.

“We have great progress this week, but more work ahead in order to truly build back better for all Americans,” the progressive lawmaker said.

The bill the Ways and Means Committee is considering would raise the rate of a minimum tax on U.S. corporations’ foreign earnings to about 16.5 percent, while President Biden had previously proposed raising it to 21 percent. 

Doggett urged the Ways and Means Committee to further raise the rate, in order to narrow the gap between the tax rates that companies pay on their domestic and foreign income.

“We should shut the door fully to stop tax incentives for shifting American jobs overseas by reducing the giant gap between the tax rate encouraging an overseas investment and the higher rate for investment here at home,” Doggett said.

Democrats are divided on international tax changes. While Doggett and some progressive groups want the Ways and Means Committee to raise taxes more aggressively on multinationals, some moderate Democrats have said that the minimum tax on foreign earnings should not be increased dramatically.

— Naomi Jagoda 

Republicans ask technical questions about bill 

10:12 a.m.

Thomas Barthold, chief of staff for the Joint Committee on Taxation, and Amy Hall, staff director of the Ways and Means Health Subcommittee, described the legislation to the lawmakers. 

Republicans then asked a series of questions to Barthold, some of which were focused on the impact of the tax provisions on small businesses and the middle class.

Barthold said the Joint Committee on Taxation is preparing an analysis of the impact of the bill on various income groups, and he hopes that analysis will be released later in the day.

The Ways and Means Committee is going to spend the remainder of the markup focused on the wide-ranging section of the bill that covers infrastructure financing, renewable energy tax incentives, expanding the social safety net, prescription drug pricing and tax increases.

— Naomi Jagoda

Ways and Means kicks off tax debate

9:36 a.m.

Neal defended the plan’s proposed tax hikes on wealthy corporations and individuals in opening remarks as his panel resumed marking up its portions of Democrats’ forthcoming social spending package.

Neal said the proposed tax increases “will go a long way in responsibly paying” for the party’s planned investments in its reconciliation package, while also claiming “the rates will still remain lower than they were in the 2017 tax law.”

“And, despite the rhetoric we will hear today, the truth is we have carefully made sure to protect middle-class Americans and small businesses from experiencing any tax increases,” he added, foreshadowing expected GOP arguments against the plan. 

Rep. Kevin Brady (Texas), the top Republican on the tax-writing committee, argued Democrats’ spending proposals will ultimately “raise taxes on the middle class and small business.”

“Never has our government wasted so much to kill so many American jobs, drive prices even higher and hook a whole new generation of poor on government dependency,” he said.

“When businesses are fighting to recover from the COVID pandemic, how will raising their taxes, help them get back on their feet and get Americans back to work?” he added. 

— Aris Folley

View original