Episode Details

Has Joe Manchin really, finally seen the light? Word is that President (sorry) Senator Manchin has agreed to roughly $433 billion in new spending, much of it focused on lowering energy costs, increasing clean energy production, and reducing carbon emissions.

Part of the Manchin-approved deal would raise $739 billion in taxes over the next decade — including a new minimum tax on corporations and additional funding to help the Internal Revenue Service pursue tax cheats.

1. A few grounds for skepticism

If this deal happens, great. But by my count this is the third time Manchin has agreed to support something Democrats desperately want, only to reverse himself a bit later.

There’s also the inconvenient reality of the ever-elusive, often bizarre Arizona Democrat Kyrsten Sinema, who has made opposition to tax increases on the wealthy one of the cornerstones of her short, regressive time in the Senate. (Remember, Dems need 50 votes.)

Putting all the blame on Manchin and Sinema for stopping Dems from raising taxes on big corporations and the wealthy lets too many other Democratic lawmakers off the hook.

Democratic senators and representatives from New York, New Jersey, and California have insisted that any tax bill must raise or eliminate the $10,000 cap on the state and local tax deduction, which has hit higher-income taxpayers in these states. (It was the only slightly progressive feature of the Trump tax cut, thrown in to penalize these anti-Trump jurisdictions.) Will they go along with the Manchin-supported tax increase?

Many Democratic lawmakers cried foul recently when Democrats on the House Ways and Means Committee considered imposing Social Security payroll taxes on wages and self-employment earnings above $400,000, to help fortify Social Security. Will they go along with the Manchin tax increase?

Meanwhile, Democrats such as Senator Jon Tester of Montana blocked Biden’s plan to tax unrealized capital gains at death, expressing concerns about what it would mean for family-owned farms and businesses. Translated: They’ve been bought by Big Ag. Will Big Ag go along with the Manchin tax increase?

House Democrats shot down a plan to require banks to report annual account flows to the Internal Revenue Service, saying it was too intrusive. Why should Democrats object to giving the IRS the data it needs to collect taxes that are due? Will they go along with the Manchin tax increase, some of whose revenue will beef up IRS enforcement?

The record isn’t encouraging. Democrats have so far failed to increase taxes on big corporations or the wealthy, even though a Democratic president now occupies the White House and Democrats control both houses of Congress.

2. The Manchin-approved tax is still small potatoes

Even if the Manchin-approved $739 billion tax increase over ten years gets enacted, it would still be small potatoes considering that large corporations have been enjoying record profits (even with the current economic turmoil, they’re sufficiently flush to be buying back their own stock at near-record levels); that the ratio between the pay of CEOs in large corporations and the pay of average workers has never been as large as it is today; and that the richest Americans have by now accumulated the largest share of the nation’s wealth since the Gilded Age of the late nineteenth century