A Democratic proposal to tax the unrealized gains of billionaires is in danger of dying the same day it was proposed.
The plan, which Sen. Ron Wyden has worked on for three years, was first introduced on Wednesday as a Hail Mary to help fund Democrats’ infrastructure and social spending package, but just hours later, House Ways and Means Committee Chairman Richard Neal said it is now out of consideration, Bloomberg reported.
News that the tax proposal was on the chopping block came after Democratic Sen. Joe Manchin of West Virginia said he didn’t support the legislation. Manchin, along with fellow centrist Sen. Kyrsten Sinema of Arizona, would have to back the proposal, as Democrats can’t afford to lose even a single vote in the divided Senate.
“I don’t like it,” Manchin said of his colleague’s proposal. “I don’t like the connotation that we’re targeting different people, as people that basically, they contributed to society and create a lot of jobs and a lot of money and give a lot to philanthropic pursuits.”
News of its almost certain exclusion is another blow to Democrats, who have been working around the clock to find funding mechanisms for the spending package, which is estimated to clock in at about $2 trillion.
While the billionaire tax appears in danger, the House leadership is now reportedly in discussion with the Senate about including a 3% surtax that would stack onto the top income rate for individuals earning in excess of $10 million.
Democrats had originally planned to hike the corporate tax rate, the top individual tax rate, and the capital gains rate for high earners, but Sinema has said she would not support increasing any of those rates.
While Sinema is opposed to increasing the headline corporate tax rate, she is reportedly open to a 15% minimum tax on the foreign earnings of corporations. Current proposed changes in international taxation would net more than $100 billion, according to the Tax Foundation, although that is well short of what Democrats need to fully fund their package.