Manchin raises concern over billionaire tax
Sen. Joe Manchin (D-W.Va.) on Wednesday said he doesn’t like the idea of targeting only the 700 wealthiest Americans to pay for a big chunk of the Democrats’ spending package, raising doubts over a newly proposed tax on billionaires.
“I don’t like it. I don’t like the connotation that we’re targeting different people,” Manchin told reporters when asked about the new tax proposal sponsored by Senate Finance Committee Chairman Ron Wyden (D-Ore.) that would hit billionaires and people who earned $100 million or more in three consecutive years.
Manchin argued that the ultra-wealthy “bring a lot of jobs, invest a lot of money and give a lot to philanthropic pursuits.”
“There’s a lot going on. There’s a lot going on with that. It’s very convoluted,” he said when asked about Wyden’s proposal.
Wyden’s bill runs 107 pages longs and addresses some of the most complicated sections of the tax code: the myriad loopholes that allow the super-rich to pass on wealth through trusts, gifts, annuities, life insurance policies and other vehicles.
Manchin’s criticism of the proposal prompted a frustrated response from Senate Budget Committee Chairman Bernie Sanders (I-Vt.), who lamented that a variety of Democratic tax proposals have already been pushed off the table.
“Every sensible revenue option seems to be destroyed. … So it seems to me almost every sensible progressive revenue option that the president wants, that the American people want, that I want, seems to be sabotaged,” Sanders grumbled to reporters on his way to a morning vote.
Manchin predicted Wednesday morning that Democrats are likely to enact reform to spread the tax burden for the spending bill more broadly, though he didn’t specify if that means closing tax loopholes for the rich or raising taxes on people who earn below $100 million annually or have a net worth below $1 billion.
“I believe everyone’s going to pay. I believe that we will end up where everyone must participate,” he said.
Manchin floated the idea of what he called a “Patriotic Tax” that would entail a minimum 15 percent tax on individuals who otherwise would escape federal taxes thanks to various loopholes.
“Everybody in this country that has been blessed and prospered should pay a Patriotic Tax. If you’re to the point where you’re able to use all of the tax forms — if you can — to your advantage and you end up with a zero tax liability, but have had a very, very good life and have had a lot of opportunities — there should be a 15 percent Patriotic Tax,” he said.
Manchin noted that the entire Democratic caucus supports a 15 percent minimum tax on corporations and suggested a similar idea could be applied to the very wealthy.
“We’ve all agreed on a 15 percent corporate tax. People in the stratosphere, rather than trying to penalize them, we ought to be pleased this country is able to produce the wealth. But with that, there’s a patriotic duty that you should be paying something to this great country to give you the protection and the support and the opportunities,” he said. “Everyone should pay their fair share.”
Wyden said Wednesday that he read Manchin into his billionaires’ tax proposal as he was crafting it and that talks will continue.
“Sen. Manchin has always supported the principle that the very, very wealthy should pay their fair share. So we’re going to talk,” Wyden said.
“We talked to him and he’s seen some paper and apparently would like to talk some more,” he added.
Wyden said the problem with the proposal to impose a 15 percent Patriotic Tax is that many billionaires don’t report much income on an annual basis and instead borrow money against their untaxed assets to finance their lavish lifestyles.
“I’m interested of course in any of his suggestions,” he said. “Part of the issue is that [billionaires] don’t pay income taxes. And so what I’ve said is I’ve got a billionaires tax so they’re going to pay something every year.”
A vast trove of IRS information reported on by ProPublica.org in June showed that some of the nation’s richest people were able to avoid paying income taxes entirely by using the tax code their advantages.
Elon Musk, the co-founder of Tesla, who is worth an estimated $255 billion, didn’t pay any federal income tax in 2018, according to ProPublica. And Jeff Bezos, the founder of Amazon.com, who is worth an estimated $193 billion, didn’t pay any federal income tax in 2007 and 2011.
Jordain Carney contributed. Updated at 12:38 p.m.