Sen. Ron Wyden has released a duo of tax proposals that Democrats are looking at to help fund their $3.5 trillion spending package.
As Congress works to piece various policy proposals into a coherent reconciliation bill, Wyden, who is the chairman of the Senate Finance Committee, proposed two tax hikes that could bring in billions in funding for the piece of legislation.
The options, which are part of a menu of tax offerings that Democrats hope they can find agreement on, focus on targeting the wealthy and corporations. One proposal would impose a 2% tax on stock buybacks from publicly traded companies.
“Instead of spending billions buying back stocks and handing out CEO bonuses, it’s past time Wall Street paid its fair share and reinvested more of that capital into the workers and communities who make those profits possible,” said Sen. Sherrod Brown of Ohio, who released the proposals with Wyden.
The stock buyback option is expected to raise some $100 billion over the next decade, according to Wyden’s office.
The second proposal, which Democrats hope will raise some $172 billion in 10 years, deals with large business partnerships. The lawmakers hope to generate revenue by making it more difficult for partnerships to avoid paying taxes by taking advantage of the complexity of current law and the difficulty that the Internal Revenue Service has with auditing them.
About 70% of income from business partnerships flows to the top 1% of earners in the United States, according to the New York Times.
“The constant theme running through our tax code is, paying taxes is mandatory for working people, but optional for wealthy investors and megacorporations. That’s especially true when it comes to pass-through businesses and partnerships, the preferred tax avoidance tools for those at the top,” Wyden said.
The combined proposals add to a litany of other changes to the tax code that are being considered, including raising the corporate income tax rate, raising the top individual income rate to 39.6%, and taxing capital gains for households making more than a certain amount as ordinary income.
The spending package cannot add more than $1.75 trillion to the deficit over the next decade, according to the language used in the reconciliation instructions, which is the budgetary process that allows Democrats to move the legislation while bypassing Republican filibusters.
Democrats are threading the needle on the proposal, given that they need every single vote they have in the Senate and can’t afford to lose more than a few votes in the House in order to ram through the legislation.
Some more centrist Democrats, who worry about the national debt, have expressed hesitance about the possible price of the bill and are hoping to see it paid for. Others in the party, though, are less concerned about raising revenue and more interested in seeing how much of the Democratic agenda they can get passed prior to the 2022 elections.