On The Money – Presented by Wells Fargo – Democrats push tax plan through hurdles
Happy Wednesday and welcome to On The Moneyyour nightly guide to everything related to your bills, bank account, and bottom line. Subscribe here: thehill.com/newsletter-signup.
Today’s big deal: A key step toward passing a major tax overhaul through President Biden’s multi-trillion infrastructure and social services bill. We’ll also look at a bill to dip the Fed into the fight against climate change and a plea from CEOs on the debt limit.
But first, a bizarre conversation with a Jerome Powell’s AI simulation.
For The Hill, I’m Sylvan Lane. Email me at [email protected] or @SylvanLane. You can reach my colleagues from the finance team Naomi Jagoda at [email protected] or @NJagoda and Aris Folley at [email protected] or @ArisFolley.
Panel passes key part of Dems’ $3.5 billion bill
The House Ways and Means Committee on Wednesday approved much of the Democrats’ $3.5 trillion social spending package, including provisions that would raise taxes on high-income individuals and corporations to offset the cost of new expenses:
- The committee pushed through the legislation in a vote close to the party line of 24-19.
- Representative Stephanie Murphy (D-Florida) joined Republicans in voting against the measure.
- He now heads to the Budget Committee, which will combine the various elements of the spending package approved by House panels.
Legislation approved by the Ways and Means Committee on Wednesday includes a wide range of Democrat priorities:
- It would expand infrastructure funding tools, expand the low-income housing tax credit, and extend and expand renewable energy tax credits.
- It would also extend much of the child tax credit expansion Democrats signed into law earlier this year through 2025, while making the credit fully refundable on a permanent basis so lower-income families can receive the full amount of the credit.
The Ways and Means Committee measure also includes provisions to pay for new spending and tax breaks elsewhere in the package. It would be :
- Raise the corporate tax rate for income over $5 million from 21% to 26.5%
- Increase the top personal income tax rate from 37% to 39.6%
- Increase top capital gains rate from 20% to 25%
- And impose a 3% surtax on personal income over $5 million.
It would also provide the IRS with an additional $80 billion to strengthen tax enforcement and modernize its technology. Naomi and Aris break it down here.
A MESSAGE FROM WELLS FARGO
How a DC florist is rebuilding with PPP loans
Le Printemps floral store in DC was able to stay open during the pandemic thanks to two Paycheck Protection Program (PPP) loans booked through Wells Fargo.
LEADING THE DAY
CEOs urge Congress to raise debt ceiling or risk ‘avoidable crisis’
Wednesday Business Roundtable sent a letter to congressional leaders warning that they could create an economic crisis if they fail to quickly raise the debt ceiling.
The lobby group, which represents the CEOs of some of the nation’s biggest corporations, is among the first prominent business organizations to publicly weigh in on the debt ceiling, saying Congress’ inaction on the issue makes companies nervous Americans.
“Failure to raise the U.S. federal debt limit to meet U.S. obligations would produce an otherwise avoidable crisis and pose an unacceptable risk to the nation’s economic growth, job creation, and financial markets,” the CEO wrote. of Business Roundtable Joshua Bolten and Walmart CEO Doug McMillon in a letter. to the leaders of Congress.
The leaders wrote that continued inaction on the debt limit could lead to an erosion of the country’s credit rating that would impose higher borrowing costs on the federal government and U.S. businesses amid a deadly pandemic. Karl Evers-Hillstrom of The Hill see you here.
Bill would force Fed to defund fossil fuels
Three progressive House Democrats introduced a bill on Wednesday that would force the Federal Reserve to break up banks if they do not reduce the carbon emissions they finance in accordance with the Paris climate agreement.
The bill, called the Fossil Free Finance Act, directs the Fed to take unprecedented action designed to steer financial support away from oil, gas, coal and corporates by disentangling banks that refuse to comply. The measure also covers the financing of the destruction of natural forests.
How it works: Under the bill, banks with more than $50 billion in assets must develop plans to cut the carbon emissions they finance by 50% by 2030 and 100% of their carbon emissions funded by 2050; ending new and expanded fossil fuel projects after 2022; end funding for all fossil fuel projects after 2030; and stop funding thermal coal after 2024.
- Banks that fail to submit or comply with Fed-approved emissions reduction plans could face stiff penalties, including being forced to divest assets and lose deposit insurance with the Federal Deposit Insurance Corporation.
- Such penalties are rarely imposed, and only in serious cases of fraud, mismanagement or other dangerous or illegal behavior.
The prognosis: While President Biden and Democrats have proposed sweeping measures to reduce carbon emissions, the Fossil Free Finance Act is unlikely to become law. The bill would almost certainly be defeated by a Republican filibuster in the Senate, even if enough moderate Democrats vote in favor of the bill in the House. I have more on the measure, and why it was featured here.
LABOR OFFICE TEST
OSHA faces big challenge with Biden vaccine mandate
President Biden will rely heavily on a small division of the Labor Department to implement his new vaccine mandate for the private sector, perhaps the biggest test for an office that has faced security issues. funding and personnel in recent years.
- The Occupational Safety and Health Administration (OSHA), vastly understaffed under the Trump administration, is now tasked with crafting Biden’s emergency rule on COVID-19 vaccines and testing that will apply to businesses of at least 100 employees.
- The high-profile role is likely to make OSHA a target of attack from many Republicans and those in the business community who view the mandate as government overreach.
“OSHA has never been a beloved agency for Republicans. They have always sued OSHA for interfering with corporate autonomy,” said Jordan Barab, former deputy assistant secretary for OSHA in the Obama administration. The Hill’s Alex Gangitano explain here.
PRESENTED BY WELLS FARGO
DC small businesses get $10 million from Wells Fargo
Eddie Lofton of JC Lofton Tailors on U Street is rebuilding his business with a grant from the non-profit LISC DC
Wells Fargo Open for Business Fund, a small business recovery effort donated $10 million to nonprofits that support businesses in the district to this day.
Good to know
Treasury Secretary Janet Yellen urges House Democrats to do more to stop tax fraud.
Here’s what else we’ve got our eyes on:
- President Biden met on wednesday with Sense. Kyrsten Sinema (D-Arizona) and Joe Manchin (DW.Va.) to hear their concerns about Democrats’ plans to pass a $3.5 trillion reconciliation package, according to sources familiar with the plans.
- Rep. Debbie Wasserman Schultz (D-Florida) said Tuesday that adhering to public health guidelines and increasing vaccination rates are necessary to maintain small businesses afloat during the coronavirus pandemic.
Lawmakers are pressing Facebook over the potential negative implications of its products on teens after a bombshell report detailed the company’s internal research into the effect Instagram is having on adolescent mental health.
That’s all for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. Well see you tomorrow.