Biden Tax Plan Could Face Roadblocks in Congress
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What is the main topic discussed in this episode?
Money Briefing for Tuesday, November 10th. I'm J.R. Whalen for The Wall Street Journal.
What are the core elements of Biden's proposed tax plan?
President-elect Joe Biden campaigned on an economic plan that includes higher taxes on corporations, capital gains, and households making over $400,000. But any chance of Biden's tax plan going into effect depends on which party controls Congress. Even razor-thin Democratic control would make implementing his tax plan a tall order.
In a 50-50 Senate with Vice President-elect Harris breaking any tie votes, they could move through some tax increases. It would be tricky. They'd have to be the tax increases that could get just enough support in the House and also sort of unite the moderate and progressive parts of the Democratic caucus in the Senate.
But what tax changes could pass a Republican-controlled Senate? And what impact should you expect on your investments tied to the stock market? Our tax reporter Richard Rubin will join us with some answers after the break.
How would Senate control affect the fate of Biden's tax increases?
President-elect Joe Biden's sweeping tax plan, which amounts to a net tax increase of more than $2 trillion over a decade, was a hallmark of his campaign. But with the balance of power in Congress yet to be determined, it's unclear what, if any, components of the package could actually become law. To discuss what could happen, let's bring in our tax reporter, Richard Rubin. Rich, thanks for being with us. Oh, sure. So during the campaign, Joe Biden made it pretty clear what his tax policy would be.
Because President Trump's tax plans for a second term were so vague, the Biden plan got a lot of attention. He had significant proposals for tax increases on corporations, on high-income individuals, and also for some tax cuts as well. And so... he talked about it quite a bit on the campaign trail.
What could happen if Republicans keep a Senate majority?
But of course, the president doesn't implement tax policy. And because of runoffs expected in a few Senate races, we don't know which party will be in control. But whoever is, will have a very thin majority. How would that play into things?
Oh, there's an enormous difference between what happens if Democrats are able to win those two runoffs in Georgia in January and take the Senate versus not. Let's just take those two scenarios in turn. If the Democrats don't win those two and Republicans end up with a majority in the Senate, then basically all of the Biden tax increase proposals are off the table. Republicans would have the ability to prevent them from even coming to a vote in the Senate or
How would a 50-50 Senate with Vice President Harris breaking ties change the path for tax policy?
And there's really just not much at all of a clear path for how they would get enacted. Republicans oppose tax increases in general, Mitch McConnell in particular, the Senate majority leader. And so we can talk some more about what kinds of things might happen on taxes with a Republican-controlled Senate. But really, it would be a sort of blockade just the way that we saw a blockade on a lot of tax increase proposals when Republicans were in charge of the Senate in the final years of President Obama's term. The other way, you know, you asked about sort of a slim majority. The difference between a slim Republican majority and a slim Democratic majority is really big because then the Biden proposals could, at least in some form, move through under fast-track procedures that only require a simple majority.
In a 50-50 Senate with...
How might Democratic control of the House influence tax negotiations?
Vice President-elect Harris breaking any tie votes, they could move through some tax increases. It would be tricky. They'd have to be the tax increases that could get just enough support in the House and also sort of unite the moderate and progressive parts of the Democratic caucus in the Senate. But whatever you could get 50 votes for in the Senate, you could do. And so there's actually a lot on the line in these races in Georgia because that will really tell us a lot about the tenor of what the next couple of years are going to look like.
And how about in the House? The Democrats retained control there. Would that make things any easier?
Yes, in the sense that with Democratic control of the House, they can at some level set the agenda and they've got, you know, they would have at least one chamber and maybe two.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–0:10
2
What are the core elements of Biden's proposed tax plan?
0:10–1:10
3
How would Senate control affect the fate of Biden's tax increases?
1:10–1:56
4
What could happen if Republicans keep a Senate majority?
1:56–2:35
5
How would a 50-50 Senate with Vice President Harris breaking ties change the path for tax policy?
2:35–3:25
6
How might Democratic control of the House influence tax negotiations?
3:25–5:02
7
What tax changes can Biden pursue without Congress and through regulatory action?
5:02–6:20
8
Where are the most likely areas for bipartisan compromise on taxes and stimulus?
6:20–9:18
Speakers
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