Up Next: Reconciliation II

Drawing via TaxmanComix.

While everybody's talking about Manchin and the filibuster, I'd like to note that there should be more good news for Democrats and other Americans working its way through the pipeline, in the form of a sequel to today's $1.9-trillion BFD: because the current bill is actually last year's budget reconciliation (fiscal year 2021), the thing Mnuchin and McConnell and the Speaker weren't able to do; there's still FY 2022 to go, and it is likely to be a fairly BFD in its own right.

Not that it will include a minimum wage hike or paid family leave or the election reforms we need so badly—these aren't eligible for reconciliation because they're regarded as "extraneous" to the budget. But you know what isn't? 

For one, taxation: An opportunity for the Biden administration to make its first moves on the tax system without having to worry about the filibuster. We'll still have to worry about Democrats, including President Manchin, though, and that could be a problem—predictably parochial, the only tax issue he takes a strong position on seems to be carbon tax, which conflicts with pretending to West Virginian voters that the coal industry is going to come back, but he also favors a regressive Value Added Tax. 

On the other side is Elizabeth Warren and the wealth tax proposal which Biden and his increasingly radical-sounding treasury secretary, Janet Yellen, are rejecting, but not for the reasons you might imagine: she says it's too hard to implement (valuing the net assets of every wealthy individual every year) and would mainly lead to the development of new methods of cheating. But she's aiming at wealth inequality all the same:

She plans to explore stopping a rule that allows assets to be passed on after death at their current — or “stepped up” — value, without paying taxes on the gains accrued over time. The Center on Budget and Policy Priorities crunched the numbers and estimated that unrealized capital gains account for as much as 55 percent of assets in estates worth more than $100 million.

(This is better explained in the CBPP analysis, which you should look at, without using the confusing term "stepped up", under the heading "Estate Tax Serves as a Backstop to Capital Gains Tax".)

Meanwhile, Biden's own program aims to raise $3.3 trillion in taxes over the next ten years, every dime of it from people with incomes over $400,000 or corporations, by

• raising the top marginal rate from 37% to 39.6%
• requiring taxpayers with income of $1 million or more to pay regular income tax rates on capital gains (i.e., up to 39.6%, instead of the special 20% capital gains rate under current law)
• IMPOSING SOCIAL SECURITY PAYROLL TAX ON PEOPLE EARNING OVER $400,000, RESCUING THE SOCIAL SECURITY TRUST FUND WITH AN INFUSION OF $740 BILLION OVER THE NEXT TEN YEARS AND WHY AREN'T PEOPLE SCREAMING WITH DELIGHTED AMAZEMENT OVER THIS DIRECT TRANSFER OF THREE QUARTERS OF A TRILLION DOLLARS FROM THE RICH TO THE PEOPLE?
• upping corporate income tax rate from 21% to 28%
• adding a 10% "offshoring penalty surtax" to the corporate tax for profits a company earns from overseas production of goods intended for sale in the US, which will obviously do more to create US manufacturing jobs than all those idiotic trade war ideas
• reducing the estate and gift tax exemption, which allows rich people to give their friends and relatives $11.7 million tax-free as a legacy or a present, to $3.5 million for an estate and $1 million for a gift

And more. No, Senator Warren didn't write this (actually I think she did the screenplay, but not all her ideas made it into the director's cut), but it's pretty good stuff. WHY ISN'T IT GETTING COVERED?

Reconciliation II will also include big commitments to infrastructure spending and to carbon reduction, in intimate association with each other, with ideas that look as if they're drawn from somebody's plan for the Green New Deal and may give Manchin a heart attack, but hopefully not a serious one, and I'll get to those as time permits. I just want to note here that the things that can be done without ending the filibuster aren't anywhere near over, and it might be a good idea to get them done before we go to work on that.

The most important things that (probably) can't be done without ending the filibuster are

• raising the federal minimum wage, to which I'm really feeling tempted as a New Yorker to say "we got ours, suckers, along with a bunch of other states

Via.

and screw the rest of you, and

• passing the essential restoration of the For the People Act (H.R.1 and S.1) and John Lewis Voting Rights Act, which doesn't become really essential for another year or so. 

And I'm thinking maybe they can wait a little bit.