Sen. Joe Manchin won't support the tax proposals in President Joe Biden's economic plan, he said during a West Virginia radio interview Friday, adding that the significant rise in inflation last month influenced his decision.
The West Virginia Democrat, speaking on West Virginia MetroNews' "Talkline," said his support for a pared-down version of the Build Back Better Act has hinged on the findings of the latest consumer price index report. The report, which was released Wednesday, showed that the consumer price index increased by 9.1% over the last year.
"I can't make that decision on taxes of any type and also on the energy and climate because it takes the taxes to pay for the investment in the clean energy technology that I'm in favor of," Manchin said. "But I'm not going to do something in overreach that causes more problems."
Democratic negotiators have spent several months trying to win support for the Build Back Better Act from Manchin and Sen. Kyrsten Sinema, D-Ariz., as the two senators' approval is necessary to send the legislation to Biden's desk. On the other side of the aisle, Republicans have characterized the legislation, which includes provisions addressing child care, education, family leave, health care, and climate change, as a bloated tax-and-spend proposal.
The senator said his biggest concern about the Build Back Better Act, passed by the House in November, is that the proposal would result in a "complete social realignment." The $1.5 trillion Build Back Better Act, or H.R. 5376, would fund its spending proposals with individual and corporate tax increases that include raising the rates of several levies on U.S.-based and internationally based companies' foreign earnings. It would impose a 1% excise tax on corporate stock buybacks and a 15% alternative minimum corporate book income tax on businesses that report more than $1 billion in adjusted financial income.
The plan's tax hikes on high-income individuals include a 5% tax on taxpayers with modified adjusted gross income in excess of $10 million and an additional tax of 3% on income higher than $25 million. The bill would also raise revenue by tightening net investment income rules for taxpayers, trusts, and estates with incomes higher than $400,000 and by permanently restricting the use of excess business losses for noncorporate taxpayers.
"I said 'Mr. President, this piece of legislation is going to change our country from when John Kennedy said, 'Ask not what your country can do for you, ask what you can do for your country' to 'How much more can my country do for me?' " Manchin said. "There's no such thing as Build Back Better Again — this is financial security and energy security."
Manchin didn't blow up negotiations that have been ongoing for the last several months, but said the significant hike in inflation quashed his support.
"I want people to pay their fair share, I want corporations to pay their fair share, but I've got to be careful that corporations aren't basically stymied to where they won't invest, they won't hire, they start laying off; I want to make sure none of that can happen," he said.
Manchin added that he had asked Senate Majority Leader Chuck Schumer, D-N.Y., to wait until the inflation figures and any interest rate hikes came out this month before "making a decision [about] what we can do and how much we can do."
Manchin also said he has advised Schumer, who is working to negotiate major pieces of legislation before lawmakers leave for their August recess, to pass legislation to reduce drug prices by allowing Medicare to negotiate costs, which he said would save $288 billion over a decade. In addition to passing a drug pricing proposal, lawmakers should also extend subsidies for the Affordable Care Act and reduce debt, he added.
The Joint Committee on Taxation said July 11 that the business, individual and energy tax changes in two sections of the House-passed Build Back Better Act would generally raise taxes, but the change on most returns would be less than $100. According to the report, the percentage of returns that would see a tax change under $100 would range from 63.4% in 2029 to 75.4% in 2023.
Published on July 20, 2022