Bernie Sanders says he wants over $3.5 trillion for a Democrat-only infrastructure package. Senate Democrats aren’t ready to commit.

Bernie Sanders White House
Senate Budget Committee Chairman Bernie Sanders (I-VT) talks to reporters outside the White House.

  • Sanders wants a Democrat-only infrastructure bill that’s larger than $3.5 trillion.
  • “I’m going to fight to make that proposal as robust as it can be,” he said outside the White House.
  • Talks are in their early stages, and Insider spoke to several Democrats who weren’t ready to commit.
  • See more stories on Insider’s business page.

Sen. Bernie Sanders on Monday said he’s pushing Democrat-only infrastructure package larger than $3.5 trillion, as Senate Democrats kicked off a frenzied legislative period.

“I’m going to fight to make that proposal as robust as it can be,” Sanders told reporters outside the White House after an afternoon meeting with President Joe Biden. He’s pushed for $6 trillion in new spending and shot down a $3.5 trillion price tag that has been floated.

The price tag was pitched by Sen. Mark Warner of Virginia, according to two people familiar with the talks. Both were granted anonymity because they weren’t authorized to speak about the negotiations.

Sanders also said the legislation was a way to show average Americans that the government was capable of improving their lives.

“We want to see a reconciliation bill which shows the working families of this country that government can and must work for them,” Sanders said, referring to the legislative pathway Democrats will use to approve a bill with only a simple majority, skirting Republicans.

He added that the package Democrats are drafting could be among the most transformative since the New Deal era.

“What we are trying to do is transformative,” he said. ‘The legislation that the president and I are supporting will go further to improve the lives of working people than any legislation since the 1930s.”

It comes as Sanders starts deploying a substantial amount of influence as chair of the Senate Budget Committee over the reconciliation process. The Vermont senator has a big role shaping the size and scope of Biden’s tax-and-spending plans, and his committee is tasked with writing instructions on federal spending and taxes to other Congressional committees.

Over the weekend, Sanders told The New York Times he’s pressing for a party-line infrastructure package topping $3 trillion that includes housing, climate, childcare, and paid leave among other new initiatives. That could set up a clash with moderate Senate Democrats like Warner and Joe Manchin of West Virginia who favor a slimmer party-line bill. Manchin has expressed support in the past for a $2 trillion party-line bill that’s fully paid for.

Given talks appear to be in their early stages, several Senate Democrats said they weren’t ready to back Sanders’ large price tag. They are racing to kick off the reconciliation process within the month, but a final bill wouldn’t be passed until sometime in the fall.

Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, deflected when asked if he could support a package of that size. The panel is in charge of drafting the tax components that generate revenue for eventual infrastructure legislation.

“My colleagues and I have been talking all through the break,” Wyden told Insider, referring to the two-week July 4 recess. “We’re going to do some more talking.”

Other Democrats also weren’t ready to throw their support behind the hefty price tag pitched by Sanders.

“Depends on what it’s spent for and how it’s paid for,” Sen. Jon Tester of Montana, a member of the bipartisan group that struck a $1 trillion bipartisan deal with Senate Republicans, told Insider.

Sen. Chris Coons of Delaware, a key Biden ally, demurred as well. “I’m very focused on getting to text on the infrastructure bill,’ he said. “What matters more than the price tag to me is the contents and the details.”

“To me, it’s much more important to try to determine what’s in the package than to start at a topline and work backwards,” Sen. Angus King of Maine, an independent who caucuses with Democrats, said in an interview. “I’d rather say these are the things the country needs and that’s the way I’m going to approach it.”

Democrats hold a 50-50 Senate that relies on a tie-breaking vote from Vice President Kamala Harris. Every Senate Democrat must be onboard the party-line bill or else the effort collapses.

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Bernie Sanders said he’d oppose a $3 trillion Democrat-only infrastructure plan since it’s ‘much too low,’ potentially setting up spending showdown with Manchin

Bernie Sanders
  • Sanders ruled out backing a Democrat-only infrastructure plan below $3 trillion.
  • “That’s much too low,” he told New York Times opinion columnist Maureen Dowd.
  • It may set up a confrontation with centrists like Joe Manchin, who favor a smaller plan.
  • See more stories on Insider’s business page.

Sen. Bernie Sanders indicated that he would oppose a Democrat-only spending bill if its price tag didn’t top $3 trillion, brushing anything lower as too meager. It may set the stage for a confrontation between Sanders and moderate Democrats looking to restrain the size of a follow-up package.

In an interview with New York Times opinion columnist Maureen Dowd published Saturday, the Vermont senator ruled out backing a party-line infrastructure plan that amounted to either $2 trillion or $3 trillion.

“That’s much too low,” he told Dowd. He also pulled out a list of his priorities for a reconciliation package.

They appeared to include broadband, climate, childcare, universal pre-K, paid family and medical leave, Medicare expansion and housing among others.

“Does anyone deny that our child care system, for example, is a disaster?” Sanders told Dowd. “Does anyone deny that pre-K, similarly, is totally inadequate? Does anyone deny that there’s something absurd that our young people can’t afford to go to college or are leaving school deeply in debt? Does anybody deny that our physical infrastructure is collapsing?”

Sanders’s remarks could potentially set up a showdown with Sen. Joe Manchin of West Virginia as Democrats move ahead with a reconciliation spending package. Reconciliation is a legislative tactic Democrats are poised to use and circumvent Republicans because only a simple majority is needed for certain bills.

The party holds a narrow majority in the House and a 50-50 Senate that relies on a tie-breaking vote from Vice President Kamala Harris. Every Senate Democrat must be onboard as a result or else the package fails.

Manchin has made clear he favors a party-line package that’s fully paid for with tax increases and doesn’t grow the national debt. He previously suggested a $2 trillion price tag.

“I’ve agreed that can be done. I just haven’t agreed on the amount,” he told MSNBC late last month. “I haven’t seen everything that everybody is wanting to put into the bill.”

As chair of the Senate Budget Committee, Sanders wields enormous influence over reconciliation since the panel helps set overall spending levels. Senate Democrats are weighing up to $6 trillion in spending aimed at overhauling the economy with new initiatives in childcare, higher education, monthly cash payments to families, and clean energy programs.

Manchin along with a few other Senate Democrats like Sen. Mark Warner of Virginia have already balked at supporting $6 trillion in spending, making cuts likely.

President Joe Biden has already struck a $1 trillion infrastructure agreement with a centrist group of lawmakers concentrated on roads, bridges, and highways. But House Speaker Nancy Pelosi has dug in on not passing the plan until the Senate also approves a separate reconciliation package containing measures unlikely to draw Republican support.

It’s unclear whether it will ultimately pass, given Senate Minority Leader Mitch McConnell hasn’t thrown his support behind it yet. For now, Senate Majority Leader Chuck Schumer told Democrats to gear up for potentially long days ahead to kick off the reconciliation process before the August recess next month.

“Please be advised that time is of the essence and we have a lot of work to do,” Schumer wrote Friday in a letter to Senate Democrats. “Senators should be prepared for the possibility of working long nights, weekends, and remaining in Washington into the previously-scheduled August state work period.”

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Trump warns Senate Republicans that they’re ‘being played’ over ‘fake infrastructure proposals’

Donald Trump
Former President Donald Trump speaks at a rally at the Lorain County Fairgrounds in Wellington, Ohio on June 26, 2021.

  • Trump warned Senate Republicans to nix working with Democrats on a bipartisan infrastructure bill.
  • “You are just being played by the Radical Left Democrats,” the former president said on Friday.
  • Democrats hope to pass a separate and more robust infrastructure bill through reconciliation.
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Former President Donald Trump cautioned Senate Republicans against signing off on a bipartisan infrastructure bill and told GOP legislators to maintain the tax cuts that the party enacted during his tenure.

In a statement on Friday, Trump derided Republican members who are working with President Joe Biden and Senate Democrats as RINOs, or Republicans in name only, a pejorative generally reserved for members of the party who aren’t considered to be true conservatives.

“Very important that Senate Republicans not allow our hard-earned tax reductions to be terminated or amended in an upward trajectory in any way, shape, or form,” the former president said. “They should not be making deals on increasing taxes for the fake infrastructure proposals being put forward by Democrats, almost all of which goes to the ridiculous Green New Deal Marxist agenda.”

He added: “Keep the Trump Administrations [sic] tax cuts just where they are. Do not allow tax increases. Thinking about it, I have never seen anything so easy to win politically. Also, RINO Republicans should stop negotiating the infrastructure bill – you are just being played by the Radical Left Democrats – they will give you nothing!”

Last month, the White House and a bipartisan group of senators came to an agreement on a $1 trillion infrastructure framework that included funding for physical projects such as roads and bridges.

Read more: Joe Biden just fired a top Trump holdover at the Social Security Administration, but these 7 other Trump-era officials are still holding high-level government positions

Republicans overwhelmingly oppose any infrastructure bill that raises corporate taxes, a key element of Biden’s earlier infrastructure proposal that would have struck at the heart of Trump’s 2017 tax overhaul. That law cut the corporate tax rate from 35% to 21% through the Tax Cuts and Jobs Act.

Democrats also hope to pass a separate infrastructure bill through the reconciliation process, which would allow them to enact legislation without the threat of a filibuster.

Democratic Sen. Joe Manchin of West Virginia, a leading moderate, said last month that he would consider changes to the Trump-era tax cuts, which were also passed through the reconciliation process on a party-line vote.

“Republicans have drawn a line in the sand on not changing anything, and I thought the 2017 tax bill was a very unfair bill and weighted to a side that basically did not benefit the average American. So I voted against it,” he told NBC News. “I think there are some adjustments that need to be made.”

Sen. Bernie Sanders of Vermont, the chairman of the Senate Budget Committee, wants to pursue a more robust Democratic-led $6 trillion reconciliation bill.

“The president has given us a framework, I think it’s a comprehensive and serious framework,” he said last month. “It is the function of the Congress now to take that framework and go with it. I think it is absolutely imperative that we deal with the existential threat of climate change, that we lower the cost of prescription drugs, that we make sure elderly people can chew their food because we expand Medicare to dental care, hearing aids and eyeglasses.”

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Democratic senator says Mitch McConnell may ‘pull the football out’ from Democrats on infrastructure

Tim Kaine
Sen. Tim Kaine (D-VA).

  • Sen. Tim Kaine compared McConnell to the Peanuts character Lucy who yanks the football from Charlie Brown.
  • “It’s not unlike him to sometimes pull the football out when the kicker is just about to kick it,” Kaine told Politico.
  • McConnell is urging Biden to ensure congressional Democrats follow his lead, jeopardizing infrastructure.
  • See more stories on Insider’s business page.

Sen. Tim Kaine of Virginia offered an analogy to the “Peanuts” comic strip on Monday, comparing Senate Minority Leader Mitch McConnell to the character “Lucy” who always yanks a football away from “Charlie Brown” at the last second.

“It’s not unlike him to sometimes pull the football out when the kicker is just about to kick it. I’ve seen him do that before,” Kaine told Politico. “And I know that that’s sometimes more frustrating for the Republicans than it is for the Dems. He’s pretty inscrutable.”

Republicans have sometimes been accused of trying to pull a bait-and-switch with Democrats on immigration and infrastructure, promising backing for bipartisan measures that ultimately never materializes.

Kaine also told reporters that Democrats are starting to assemble an up to $6 trillion party-line package which will move through Congress using an arduous path called budget reconciliation. That allows Democrats to muscle through a separate package focused on childcare, climate change, and healthcare without Republican votes.

On Monday, McConnell demanded that President Joe Biden ensure Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi follow his lead and sever any link between the $1 trillion bipartisan infrastructure deal and the reconciliation package. The latter measure can clear the Senate with a simple majority.

“The President cannot let congressional Democrats hold a bipartisan bill hostage over a separate and partisan process,” he said in a statement.

Democrats are likely to trigger the party-line process in mid-July once they return from a two-week recess. But they’re clashing on both price tag and scope. Sen. Joe Manchin of West Virginia said on Sunday he would support up to a $2 trillion economic package that’s fully paid for and doesn’t grow the national debt.

Manchin’s position will likely frustrate progressives such as Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez. They’re pressing for a huge spending package that includes aggressive measures to combat climate change, tax hikes on corporations and the wealthy, along with Medicare expansion.

“I think the key for progressives is as long as Dems are willing to act by reconciliation for the pieces we couldn’t get, that’s great,” Kaine told reporters on Thursday, adding that a range of climate and immigration provisions could end up in a Democratic-only package.

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Job searches are down in states cutting federal unemployment benefits early, not what you’d expect to see from a ‘disincentive to work’

A help wanted sign is posted at a taco stand in Solana Beach, California, U.S., July 17, 2017.   REUTERS/Mike Blake
Help Wanted sign at taco stand in California

  • Half of all US states – all GOP-led – are cutting Biden’s unemployment benefits early, citing a labor shortage.
  • But Indeed data found job searches are still down in the states cutting off the benefits early.
  • This suggests the benefits are not disincentivizing work as much as the GOP argues.
  • See more stories on Insider’s business page.

Twenty-five GOP-led states have so far opted to end President Joe Biden’s $300 weekly unemployment benefits early to incentivize residents to get back to work. But it looks like the cuts aren’t motivating people to step up their job searches.

Indeed’s hiring lab released a report on Tuesday that found job-search activity is down in states that have opted to end the benefits early. The data, measured by clicks on job postings through June 18, showed increased searches in some of the states ending benefits early and decreased searches in others, but overall, total search activity was down.

Graph showing job search activity compared to state UI cutoffs.
Indeed: Job search activity and state UI cutoffs.

“It is unclear why search activity is below the baseline in states where federal UI (unemployment insurance) benefits have ended,” the report said. “If overly generous federal UI benefits were holding back job seekers, then we would expect search activity to increase, relative to the national trend, in states where those benefits have ended.”

This is the same trend seen with data on searches collected through June 4. Indeed’s Jed Kolko, who authored the report, wrote on Twitter on June 9 that decrease in job searches is “not what you’d expect” in states ending unemployment benefits early.

Insider’s Ben Winck reported in May that the “work disincentive” theory dates back decades and largely rests on a Reagan-era work, political scientist Charles Murray’s 1984 book “Losing Ground,” which rests on racially suspect data.

While it’s unclear why job searches are down in states ending benefits early, it could suggest that unemployment benefits are not deterring people from returning to the workforce as much as Republicans argue.

The May jobs report showed 559,000 payrolls being added, but Insider reported at the time that benefit cuts had not yet taken effect, more evidence that the benefits might not be disincentivizing work.

Some Democrats, like Sen. Bernie Sanders of Vermont, have criticized ending the benefits early, but White House Press Secretary Jen Psaki said the states that are cutting off benefits “have every right” to do so. Separately, Biden said it “makes sense” for benefits to expire in September.

“A temporary boost in unemployment benefits that we enacted helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated,” Biden said in a speech earlier this month. “But it’s going to expire in 90 days – it makes sense it expires in 90 days.”

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Bernie Sanders says he won’t support the bipartisan infrastructure bill if its paid for by raising gas taxes or creating fees on electric vehicles

Bernie Sanders
Vermont Sen. Bernie Sanders during an appearance on NBC News’ “Meet the Press.”

  • Vermont Sen. Bernie Sanders said Sunday he didn’t support the latest proposal for a bipartisan infrastructure bill.
  • Sanders expressed concerns over how lawmakers may pay for the bill.
  • He said he did not support an increased tax on gasoline or imposing fees on electric vehicles.
  • See more stories on Insider’s business page.

Vermont Sen. Bernie Sanders said Sunday that he believes the contents of a bipartisan infrastructure bill are “mostly good,” but said he has concerns over how lawmakers may decide to fund it.

Sanders, an Independent, made the comments during an appearance on NBC’s “Meet the Press.”

“What is in the bipartisan bill in terms of spending is, from what I can see, mostly good. It is roads and bridges, and we need to do that. That is what we are proposing in our legislation but in much greater numbers,” he said.

Sanders noted that the current draft of the legislation covers just about a quarter of what President Joe Biden had asked for as part of his ambitious proposal earlier this year. Sanders has drafted his own $6 trillion plan, as Insider previously reported.

“One of the concerns that I do have about the bipartisan bill is how they are going to pay for their proposals, and they’re not clear yet,” he added. “I don’t know that they even know yet.”

Sanders said there was speculation that lawmakers would propose paying for the bill by raising the federal gas tax, by imposing a fee on electric vehicles, and by privatizing infrastructure. As Axios reported, Sen. Susan Collins, a Republican from Maine, last week proposed using leftover COVID-19 funding and creating a tax on electric vehicles.

“Those are proposals that I would not support,” Sanders said Sunday.

“Meet the Press” moderator Chuck Todd asked Sanders if he would back the bill if there was support among Democrats, including moderate Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, for a second bill passed through the Senate’s reconciliation process that would address his other concerns.

As Insider previously reported, reconciliation is a legislative tactic that allows lawmakers to avoid the filibuster by requiring just 51 votes, though it involves strict budgetary rules.

“I don’t know that anybody could give you an honest answer to that because nobody really knows what is going to be in this bipartisan agreement and how it is going to be paid for,” Sanders said.

“So if it is roads and bridges, yeah, of course, we need to do that, and I support that. If it is regressive taxation, you know, raising the gas tax or a fee on electric vehicles, or the privatization of infrastructure, no I wouldn’t support it. But we don’t have the details right now,” he added.

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The White House is giving bipartisan infrastructure negotiations until the end of June even as progressive opposition swells

US Senator Bernie Sanders, of Vermont, speaks with reporters about potential efforts to raise the minimum wage at the US Capitol in Washington.
Sen. Bernie Sanders (I-VT).

  • The White House is giving bipartisan economic talks until the end of June for a deal to pan out.
  • Biden could potentially shift course and embrace a Democratic-only plan after that.
  • An emerging bipartisan framework is struggling to draw substantial Democratic support.
  • See more stories on Insider’s business page.

White House officials are indicating to congressional Democrats that they’re giving bipartisan infrastructure negotiations until the end of June before potentially shoving Republicans aside and moving ahead with a Democratic-only plan.

It’s a fresh sign that the Biden administration’s patience is starting to wear thin at the slow pace of economic talks with the GOP. More than two months of back-and-forth discussions haven’t yielded a major breakthrough.

“They’re giving it a week or 10 days more and that’s about it,” House Budget chair John Yarmuth told reporters on Tuesday. “Then we move along with with reconciliation – for everything.”

The White House did not immediately respond to a request for comment.

Reconciliation, the legislative tactic that only requires a simple majority to pass certain bills, is increasingly favored by progressive Democrats, who want to combine President Joe Biden’s two-part plan into a massive $4 trillion bill and muscle it through both the House and Senate with only Democratic votes.

Many on the left fear Biden’s social spending proposals – such as paid family leave and universal pre-K – would not draw strong support from Democratic centrists in the Senate, and derail that part of the plan. But Biden is pursuing a deal and the White House is giving additional time for an agreement to be struck.

A bipartisan group encompassing 10 lawmakers from both parties is still drafting a nearly $1 trillion infrastructure plan, though key details remain unclear. It includes Republican Sens. Mitt Romney of Utah, Rob Portman of Ohio, Bill Cassidy of Louisiana, Lisa Murkowski of Alaska, and Susan Collins of Maine.

The Democratic side comprises Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, Jeanne Shaheen of New Hampshire, Mark Warner of Virginia, and Jon Tester of Montana.

Sen. Bernie Sanders has come out in opposition to the emerging framework, saying its sources of revenue were not progressive enough. The group is eyeing indexing the gas tax to inflation, which may increase gas prices for average people, and repurposing stimulus funds from states.

“I wouldn’t vote for it,” Sanders told reporters on Monday. “The bottom line is there are a lot of needs facing this country. Now is the time to address those needs, and it has to be paid for in a progressive way, given the fact that we have massive income and wealth inequality in America.”

Other Democrats such as Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts, and Jeff Merkley of Oregon are coming out against a plan that doesn’t contain aggressive measures to combat climate change.

“Put me down as skeptical of these theories that somehow you get everything you want, and somehow the priorities I have might be addressed down the road,” Wyden said Wednesday. Every lost Democratic vote means an additional Republican would be needed for the plan to clear the chamber – with a bare minimum of 10 GOP votes

Others are reserving judgment until more details emerge. “I got to look at it first,” Sen. Tim Kaine of Virginia told Insider.

“I want to see it, how are the Republicans gonna pay for it?” Sen. Sherrod Brown of Ohio, chair of the Banking Committee, told Insider. “I’ll see it, I don’t know yet.”

Read the original article on Business Insider

Bernie Sanders says the Biden campaign made him feel welcome while Hillary Clinton’s ‘tolerated’ him

Bernie Sanders Hillary Clinton
Hillary Clinton and Bernie Sanders.

  • Sen. Bernie Sanders said he was treated differently by Joe Biden and Hillary Clinton’s campaigns.
  • He told CNN that he and Biden spoke, and that Biden’s team made him feel “very welcome.”
  • But by Clinton’s team he was only “tolerated,” he said.
  • See more stories on Insider’s business page.

Bernie Sanders said he got warmer treatment from President Joe Biden’s campaign team than that of Hillary Clinton.

The Vermont senator told CNN’s Gloria Berger on Sunday that Biden’s team made him feel “very welcome” when Sanders was running against him during the 2020 presidential election, according to a clip of the interview reposted by Mediaite.

He said that Biden reached out to him to talk, and they had “very useful conversations and friendly conversations.”

Berger indicated that that was different to the Clinton campaign when they were opponents in the 2016 election, and Sanders agreed.

“I was tolerated,” replied Sanders.

He added: “They wanted my support, obviously.”

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It’s perfectly legal for billionaires to pay so little in taxes. Democrats say they could finally change that after the bombshell ProPublica report.

Felipe Castro holds a sign advertising a tax-preparation office for people who still need help completing their taxes before the IRS deadline on April 14, 2010, in Miami.
Felipe Castro holds a sign advertising a tax-preparation office for people who still need help completing their taxes before the IRS deadline on April 14, 2010, in Miami.

  • A ProPublica report based on secret IRS files showed billionaires pay relatively little tax.
  • Inequality experts have been warning for years that the wealthy pay relatively low taxes.
  • The details added impetus to a push by Democrats to ramp up taxes on the country’s highest earners.
  • See more stories on Insider’s business page.

On Tuesday morning, ProPublica published a bombshell report showing how little America’s wealthiest pay in taxes, based on leaked documents from the Internal Revenue Service (IRS).

The report shows in detail how billionaires like Jeff Bezos and Warren Buffett have seen billions added to their net worth with little impact on their tax bill. It’s totally legal, and for many, not all that surprising.

“It’s not surprising at all, I think,” Chuck Collins, who works at the left-leaning Institute for Policy Studies, an organization dedicated to highlighting wealth inequality, told Insider.

Collins recently wrote a book on the ways the ultrawealthy hide their money and avoid taxation. In it, he uses the term “wealth defense industry” for the cottage industry that’s grown around helping the rich hold onto their money.

“It’s going to be very hard for ordinary people to decipher these tax transactions because they’re purposefully complex,” Collins said. “The wealth defense industry, their bread and butter is complexity, and opaqueness.”

Chuck Marr, the director of federal tax policy at the liberal-leaning Center on Budget and Progressive Priorities, said “we’ve been making this case for a long time.” He pointed to a paper from 2019 that outlines many findings similar to those in Tuesday’s report.

Still, it’s one thing to know something is likely happening, and another to see the details laid bare, and the figures involved. For example, ProPublica found that Warren Buffett paid 0.1% in “true tax rate,” which compares how much he paid each year in taxes to how much his wealth grew.

ProPublica’s report could draw widespread attention – and scrutiny – to certain intricacies of the tax code just as President Joe Biden moves to reform taxes to pay for his infrastructure proposals.

Already, Democratic lawmakers are seizing on the public report as a way to kickstart tax reform.

The report “should make it very hard for the Congress to not address it,” Marr said. “I think it really underscores, again, that very wealthy people do not pay tax on much of their income. And so this tax bill is a clear opening to address that.”

Jeff Bezos
Amazon CEO Jeff Bezos, the world’s wealthiest man.

America’s wealthiest make most of their money from assets, not income

As the 2019 CBPP paper lays out, a good amount of the income that the wealthiest bring in isn’t technically income – or at least it’s not taxed that way.

If you work a job where you receive wages in a paycheck, you’re probably familiar with the income tax, which taxes the money you get for going to work. Those wages would be income, and you’d be taxed under the income tax.

But, as both the CBPP and ProPublica note, the wealthiest Americans get most of their wealth from assets like stocks, and therefore pay taxes on capital gains.

As Marr and coauthors Samantha Jacoby and Kathleen Bryant write, capital-gains taxes are “effectively voluntary to a substantial extent: High-wealth filers may accumulate capital gains every year as their investments appreciate, but they don’t owe tax on those gains until – or unless – they ‘realize’ the gain, usually by selling the appreciated asset.”

So if you hold onto your stock assets, you’re not seeing that capital gains rate. Goldman Sachs estimated last month that the wealthiest Americans possessed between $1 trillion to $1.5 trillion in unrealized capital gains at that time. Some argue that those unrealized gains should be taxed, since the wealthiest could be sitting on valuable stocks, making money, and not paying taxes. Meanwhile, researchers at the right-leaning Tax Foundation argue that a progressive consumption tax would be a better way to tax the rich.

ProPublica reported that the ultrawealthy can also borrow hefty sums of money to pay off their bills as they sit on stocks and take in little income. “They’ll borrow money and they’ll use the stock as collateral,” Marr said. That means the wealthy are essentially using these loans as a form of income, but aren’t taxed as such.

As Marr, Jacoby, and Bryant write, “this is often a much cheaper strategy than selling stock and paying capital gains taxes, particularly when interest rates are low.”

Joe Biden
President Joe Biden.

The report could add flame to the fire for tax reform

Even before the ProPublica report, tax debate had been brewing. In particular, a provision called the “step-up basis” had been facing scrutiny.

Let’s say you’ve held onto stock for your whole life, and it’s only grown in value. If you die and leave it to someone else, the stock takes on the value at which the recipient gets it, meaning neither the original owner nor the inheritor are taxed on those gains.

For very wealthy people, Marr said, that “wipes out a lifetime of tax liability.”

Biden wants to do away with the step-up basis and he wants to tax capital gains for those making over $1 million at a rate equivalent to income.

“Broadly speaking, we know that there is more to be done to ensure that corporations, individuals who are at the highest income are paying more of their fair share,” White House Press Secretary Jen Psaki told The Washington Post in response to the ProPublica report. “Hence, it’s in the president’s proposals. His budget and part of how he’s proposing to pay for his ideas will go ahead.”

“The principle here is to equalize the treatment of ordinary income and capital gains, and that is a principle that’s neither new or particularly novel,” Brian Deese, the director of the National Economic Council, said in an April briefing. “In fact, the last president to enact a reform to equalize the treatment of ordinary income and capital gains was President Reagan, who did so while raising capital-gains taxes as part of the 1986 tax reform.”

The White House did not respond to Insider’s request for comment.

There’s been GOP resistance to further alterations to the tax code following their 2017 tax cut, especially any increase in rates. But the new reporting already ramped up the tax debate within Congress on Tuesday.

Sen. Bernie Sanders, who chairs the Senate Budget Committee, told reporters on Capitol Hill, “To the surprise of nobody I know, the rich and powerful aren’t paying their fair share, what else is new?” He urged lawmakers to approve Biden’s tax proposals.

“I do want people to understand the bottom line,” Sen. Ron Wyden, chair of the Senate Finance Committee, told reporters. “What ProPublica is revealing is, again, some of the country’s wealthiest taxpayers [that] profited handsomely during the pandemic are not paying their fair share.”

He said he’s in the process of crafting a proposal to change that. Asked by Insider about the timeline of its introduction, Wyden responded: “I’ll have it ready to go shortly.”

“Often solutions to this are portrayed as radical, but what’s radical is the current situation,” Marr said. “What’s radical is that wealthy people, a lot of their income never gets taxed. That’s radical.”

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Bernie Sanders slams Republicans who blocked Jan. 6 commission as ‘too intimidated by Trump to do the right thing’

Bernie Sanders
Sen. Bernie Sanders said the Derek Chauvin verdict was “accountability,” but not true justice.

  • Bernie Sanders blasted Republicans for blocking a January 6 commission.
  • Sanders said many Republicans are “too intimidated by Trump to do the right thing.”
  • “It is a painful day for American democracy,” Sanders said.
  • See more stories on Insider’s business page.

Sen. Bernie Sanders of Vermont on Friday ripped into his Republican colleagues in the Senate who blocked a bipartisan bill to authorize the establishment a commission on the fatal January 6 insurrection at the US Capitol.

“It is a painful day for American democracy that Senate Republicans blocked legislation creating a commission to investigate the Jan. 6th insurrection. Today in America, democracy is under assault and authoritarianism, conspiracy theories and political violence are on the rise,” Sanders said in a statement.

“I applaud the six Republicans who voted for the commission, but I am saddened that so many others are too intimidated by Trump to do the right thing,” Sanders added.

Senate Majority Leader Chuck Schumer also criticized Republicans for derailing the bill.

“Shame on the Republican Party for trying to sweep the horrors of that day under the rug because they’re afraid of Donald Trump,” Schumer said on Friday.

Former President Donald Trump vehemently opposed setting up a January 6 commission. “Republicans in the House and Senate should not approve the Democrat trap of the January 6 Commission,” he said in a statement. “Republicans must get much tougher and much smarter, and stop being used by the Radical Left.”

The 10-member commission would’ve had subpoena power to gather information about the deadly attack. It would’ve been similar to the 9/11 commission, with the bill mandating the release of a final report by the end of the year with findings on the causes of the riot and recommendations on how to prevent similar attacks on the future.

The bill, which passed in the House with the support of 35 GOP lawmakers, didn’t garner the 60 votes necessary to overcome a Republican filibuster in the upper chamber. On Friday, a motion to invoke cloture and advance the bill was defeated in a 54-35 vote. Just six Senate Republicans joined Democrats to vote in favor of advancing the bill.

Though a number of Republicans supported the bill, House Minority Leader Kevin McCarthy and Senate Minority Leader Mitch McConnell both came out against it. Republicans opposed the bill because they worried a January 6 commission would hurt their chances in the 2022 midterms by keeping the focus on Trump and his role in provoking the insurrection.

“They would like to continue to litigate the former president into the future,” McConnell said at a news conference on. Tuesday. “We think the American people going forward and in the fall of ’22 ought to focus on what this administration is doing to the country.”

Both McConnell and McCarthy were initially heavily critical of Trump over the Capitol attack. The House GOP leader said Trump bore responsibility for the events that day, while McConnell excoriated the former president for a “disgraceful dereliction of duty.”

Trump incited the Capitol riot via repeated lies about the result of the 2020 election. He falsely and repeatedly claimed that the election was stolen, pushing baseless assertions of mass voter fraud. The former president was impeached for a second time in mid-January for provoking the deadly insurrection. Five people died during or shortly after the attack, including a Capitol Police officer.

Despite criticizing Trump’s actions, McCarthy opposed impeaching him and McConnell ultimately voted to acquit the former president.

Trump in his post-presidency has persisted in falsely insisting that he won the 2020 election, and polling has consistently shown that a majority of Republicans falsely believe that President Joe Biden did not legitimately win. There’s no evidence of mass voter fraud regarding the election. Voter fraud in the US is extraordinarily rare.

Republican lawmakers in Washington have continued to exhibit unwavering loyalty to Trump, as evidenced by Friday’s vote on the January 6 commission as well as the recent ouster of GOP Rep. Liz Cheney as the number three Republican in the House. Cheney refused to endorse Trump’s “big lie” about the election, and was ostracized as a result.

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