On The Money: House Democrats cut back Biden tax hikes

On The Money: House Democrats cut back Biden tax hikes
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Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.

Today’s Big Deal: House Democrats introducing their slimmer version of Biden’s tax proposal. We’ll also look more jockeying over the debt limit and two big endorsements for Fed Chair Jerome Powell.

But first, you might want to update your iPhone.

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For The Hill, I’m Sylvan Lane. Write me at slane@thehill.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@thehill.com or @NJagoda and Aris Folley at afolley@thehill.com or @ArisFolley.

Let’s get to it.

A MESSAGE FROM WELLS FARGO

How a D.C. florist is rebuilding with PPP loans

Le Printemps floral shop in D.C. was able to stay open during the pandemic with two Paycheck Protection Program (PPP) loans booked through Wells Fargo.

85% of PPP loans booked through the bank went to companies with fewer than 10 employees.


House Democrats take step back from Biden on tax hikes 

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House Democrats on Monday released tax-increase legislation that scales back some of President BidenJoe BidenFighter jet escorts aircraft that entered restricted airspace during UN gathering Julian Castro knocks Biden administration over refugee policy FBI investigating alleged assault on Fort Bliss soldier at Afghan refugee camp MORE’s key proposals as they work to craft a massive social spending package that can get the votes to become law.

  • The bill text released Monday by the House Ways and Means Committee includes a variety of tax increases targeted at wealthy individuals and corporations in an effort to help pay for $3.5 trillion in spending and tax cuts in areas such as child care, climate and health care. 
  • But in many ways it is not as aggressive in raising taxes as Biden has proposed, prompting criticism from progressive groups.

“They have a once in a lifetime opportunity to address the egregious, unfair treatment that the wealthy get in the tax code, and the committee has refused to do it,” said Erica Payne, president and founder of the Patriotic Millionaires. Naomi explains here.

The differences: There are several areas where House Democrats’ proposal does not go as far in increasing taxes on corporations and the rich as Biden had proposed earlier this year.

  • The Ways and Means Committee would raise the corporate tax rate for income above $5 million from 21 percent to 26.5 percent, while Biden had called for a 28 percent corporate tax rate. 
  • The committee called for raising the top capital gains rate from 20 percent to 25 percent, while Biden proposed raising it further to match the top tax rate for wage income. 
  • The committee’s bill does not include a proposal Biden offered to tax capital gains at death,  limits but does not fully eliminate the carried interest tax break benefiting investment fund managers as Biden proposed, and would not increase a minimum tax on U.S. corporations’ foreign earnings by as much as Biden would.

Keep in mind: It remains to be seen how the tax proposals change as the spending package moves through Congress. Nearly every House Democrat, and every Senate Democrat, will need to vote for the spending bill for it to pass, meaning small groups of lawmakers have the ability to influence the legislation.

LEADING THE DAY 

Majority Leader <span class=Charles SchumerChuck SchumerDemocrats press Schumer on removing Confederate statues from Capitol Democrats' do-or-die moment Biden touts 'progress' during 'candid' meetings on .5T plan MORE (D-N.Y.) addresses reporters during a press conference on Wednesday, August 11, 2021 to discuss the bipartisan infrastructure bill and the budget resolution as the Senate leaves for the August district work period." width="645" height="363" data-delta="2" />

Schumer points to debt incurred under Trump to highlight need for bipartisan action

Senate Majority Leader Charles Schumer (D-N.Y.) is stepping up pressure on his Republican colleagues to help raise the debt ceiling, while pointing to debt incurred under the prior administration to underline the need for bipartisan action.

In remarks from the Senate floor on Monday, Schumer pointed to a recent memo released by the Congressional Research Service (CRS) that showed the Trump administration had racked up over $5 trillion in new debt since the debt limit was last suspended in August in 2019 through January.

“So, all of the new $5 trillion in debt, bottom line, was caused under the Trump administration,” he said, as Democrats seek to increase pressure on Republicans to agree to raise the spending limit.

The background: The push comes as Republicans and Democrats have been locked in an increasingly high-stakes game of chicken over the nation’s borrowing limit.

Aris breaks it down here.

PRESENTED BY WELLS FARGO

Eddie Lofton of JC Lofton Tailors on U Street is rebuilding his business with a grant from nonprofit LISC D.C.

Wells Fargo’s Open for Business Fund, a small business recovery effort has donated $10M to nonprofits that support District businesses to date.

 

JAY-WATCH

Federal Reserve Chairman Jerome Powell answers a question during a Senate Banking, Housing, and Urban Affairs Committee hearing to discuss the Semiannual Monetary Policy Report to the Congress on July 15

Dodd, Frank urge Biden to reappoint Powell

The architects of the Dodd-Frank Wall Street reform law on Monday urged President Biden to reappoint Federal Reserve Chairman Jerome Powell despite opposition from progressives over his support for loosening key provisions of that legislation.

In a Monday op-ed for The Hill, former Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) argued that Powell’s reappointment would give Biden “strong support” to pass a multitrillion-dollar infrastructure and social services plan — what they called the “most important issue facing us today.”

“We believe the national interest will be best served by President Biden reappointing Jerome Powell to chair the Federal Reserve System,” Dodd and Frank wrote. I explain why here.

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The background: Biden is expected to announce within weeks whether he will re-nominate Powell for another four-year term leading the Fed before his current stint expires in February. 

  • While Powell has broad bipartisan support, liberal lawmakers and activists are deeply divided over whether he should be reappointed.
  • Powell’s liberal supporters argue that his fierce support for full employment gives bipartisan credibility to Biden’s views while helping the Fed cement a transformational new approach to its mandate.

“The most important issue facing us today is the enactment of President Biden’s comprehensive program responding not just to the ravages of COVID-19 but to the underlying social and economic problems that have exacerbated its effects," they wrote. "Reappointing Mr. Powell will provide strong support for this essential step.”

BLOCKED SHOTS

A nurse prepares a dose of the Pfizer-BioNtech COVID-19 vaccine

Employers scramble to secure vaccine verification systems

Businesses are scrambling to secure systems for verifying COVID-19 vaccinations and implementing weekly testing following President Biden’s vaccine-or-test order announced last week.

The White House has not yet clarified key details of the new requirements, such as how companies should verify an employee’s vaccination status or whether the federal government will pick up the tab on testing, creating uncertainty among employers on how to move forward.

  • The administration’s rule will require companies with 100 or more workers to mandate vaccinations or weekly testing. 
  • Businesses that don’t comply with the rule could face fines up to $14,000 per violation, raising the stakes for firms that have a large number of employees to keep track of.

A large number of firms that already mandate vaccines for employees have yet to impose verification measures, instead asking employees to attest that they got the shot. That standard likely won’t satisfy the Biden administration rule, experts said, but as of now it’s not clear.

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The Hill’s Karl Evers-Hillstrom breaks it down here.

Good to Know

Rep. Cori Bush (D-Mo.) has introduced legislation that would allow people to apply for emergency rental assistance at public spaces, such as schools, libraries and transit systems, in an effort to expand access to the funds.

Here’s what else have our eye on:

  • Delta Air Lines’s chief health officer announced last week that 4,000 unvaccinated employees got inoculated after the company announced that it was adding a $200 monthly surcharge on its health care plan for employees who were not vaccinated.
  • District of Columbia Attorney General Karl Racine (D) on Monday expanded the antitrust lawsuit he filed against Amazon in May, accusing the e-commerce giant of locking first-party sellers into anti-competitive agreements.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.