A group of Senate Democrats passed legislation Wednesday to end the “interest income” tax break that investment managers later benefit from President BidenJoe BidenKinzinger, Gaetz go back and forth on Twitter about Cheney vote Cheney vote in defiant speech: Trump on “crusade to undermine our democracy” US officials testify MORE about domestic terrorism after the attack on the Capitol also called for the abolition of the tax preference as part of its human infrastructure plan.
The Interest Income Tax Income Tax Allowance enables the Investment Managers to pay tax on certain income income at capital gains rates rather than normal income rates. The Senators’ bill would require carried-over interest to be taxed at normal income rates. The current highest ordinary income ratio is 37 percent, while the current highest capital gains ratio is 20 percent.
Democratic Sens. Tammy Baldwin
Tammy Suzanne Baldwin Senate Democrats urge Biden to raise Refugee Cap House Dems to reveal drug pricing move before Biden package happens 3 million more coronavirus deaths (Wis.), Sherrod Brown
Sherrod Campbell BrownWyden: Financing infrastructure with gas tax hike a “big mistake” Sherrod Brown calls Rand Paul “a kind of madman” because he doesn’t wear a mask. On The Money: How Demand Outpaces Supply And Stifles Recovery | Montana withdraws unemployment benefits | Yellen says higher rates might be MORE necessary (Ohio) and Joe Manchin
Joe ManchinSenate panel blocks the vote on the comprehensive Wyden election bill: Financing the infrastructure with an increase in gas tax is a “big mistake”. Biden receives Sinema for a meeting on the infrastructure proposal MORE (W-Va.) Took the lead in offering the bill, which is sponsored by more than a dozen Democratic senators. Brown is a prominent progressive while Manchin is a prominent centrist, suggesting widespread support in the Democratic caucus for ending the preference for transferred interests.
“There is currently a loophole in our tax law that allows investment managers to pay less tax on wages than common West Virginian and American workers. This legislation would fill that loophole to ensure that wealthy hedge fund managers pay the appropriate amount of tax,” Manchin said an explanation. “I urge my colleagues on both sides of the aisle to support this sensible legislation that treats all workers fairly.”
The bill came after Biden proposed in his American family plan to remove the carryover preference. Biden also proposed raising both the highest normal income tax rate and the highest capital gains rate for high-income taxpayers to 39.6 percent. Biden suggests using the proceeds from these tax increases to spend in areas such as childcare and education.
Former President Trump
Donald TrumpKinzinger, Gaetz go back and forth on Twitter over Cheney Vote READ: Liz Cheney’s speech on the floor of the Cheney House in defiant speech on the floor: Trump on “Crusade to undermine our democracy” MORE had also called for the termination of the interest tax break when he ran for president in 2016, but his 2017 tax law did not cancel the preference.
“Trump broke his promise to fill that loophole and actually signed a Republican tax bill that keeps it in place,” Baldwin said in a statement. “President Biden has urged Congress to close the void on transferred interest taxes, and this legislation will do it.” Let’s get it done now and use this income to invest in labor and economic growth. “
Democratic senators have also introduced versions of the Interest Income Act in previous Congresses. A version of the bill was introduced by the House of Representatives in February. Bill Pascrell
William (Bill) James PascrellAmerica’s Jewish Communities Under Attack – Here are three things Congress can do to warn Democrats Waters censure movement opens floodgates Legislators launch bipartisan caucus on SALT withdrawal MORE (DN.J.), Andy Levin
Andrew (Andy) LevinOvernight Energy: Update of Biden Administration Conservation Goals | GOP Sees Opportunity To Beat Biden Amid Soaring Gas Prices Push For Nationwide Electric Vehicle Charging Stations Ocasio-Cortez, Levin Introduces Revised Bill To Provide Nationwide Electric Vehicle Charging System. OSHA sends draft Temporary Emergency Standard for COVID-19 to OMB Review MORE (D-Me.) And Katie Porter (D-Calif.). A number of liberal groups and unions support the measure, including the AFL-CIO, the Patriotic Millionaires and the Working Families Party.
The American Investment Council (AIC), a group representing the private equity industry, has spoken out against the bill, arguing that it would harm the economy.
“With workers and local economies continuing to struggle during this pandemic, Washington shouldn’t penalize long-term investments that create jobs, build businesses in communities and develop more renewable energies across America,” said Drew Maloney, president and CEO of AIC, in one Explanation.
-Updated at 10:32 am