On The Money: Bipartisan Senate group rules out tax hikes on infrastructure | New report reignites push for wealth tax

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THE BIG DEAL: Bipartisan Senate group rules out tax hikes on infrastructure

A bipartisan Senate group is taking tax increases off the table as lawmakers try to craft an infrastructure proposal after GOP talks with the White House collapsed Tuesday.

Raising taxes on high-income earners and corporations has been a key part of President Biden‘s infrastructure plan, making it nearly impossible to garner enough GOP support for legislation that can clear the Senate.

Sen. Jon Tester (D-Mont.), who is in the bipartisan group, said tax increases are not under consideration as senators attempt to reach consensus on how to pay for their plan.

When asked Wednesday if tax hikes were out, Tester responded: “That’s my understanding. I think there’s ways to do that; hopefully it won’t be smoke and mirrors. Bottom line, this is probably the hardest part from my perspective, is how you get it paid for.”

The state of play on infrastructure talks:

• Biden is expected to shift to negotiations with the bipartisan group of senators after talks were called off between the president and Republicans led by Sen. Shelley Moore Capito (R-W.Va.).
• The bipartisan group includes senators such as Tester and Sens. Mitt Romney (R-Utah), Kyrsten Sinema (D-Ariz.), Bill Cassidy (R-La.) and Joe Manchin (D-W.Va.).
• The group is expected to be looking at a proposal of around $900 billion, compared to Biden’s initial proposal of more than $2.2 trillion.

The Hill’s Jordain Carney has more here on the Senate infrastructure discussions.

In related news, the bipartisan House Problem Solvers Caucus on Wednesday unveiled an eight-year, $1.25 trillion infrastructure plan aimed at helping to break the impasse on the topic. The group will offer proposals on how to pay for the package in the coming days, but isn’t expected to endorse the tax increases sought by Biden and progressives, The Hill’s Scott Wong and Mike Lillis reported.

LEADING THE DAY: New report reignites push for wealth tax

A blockbuster ProPublica report on the taxes of the richest Americans is reigniting a push from progressives for a wealth tax.

The report, based on tax-return data ProPublica received from an anonymous source, details how prominent billionaires like Jeff Bezos and Elon Musk have paid little-to-no-taxes in some recent years, particularly when compared to their wealth gains.

The article comes as President Biden has proposed raising taxes on the wealthy and corporations to pay for his major spending proposals. Democrats have increasingly made raising taxes on the rich a top priority in recent years, and some progressives have called for going even further than Biden’s proposals by establishing a wealth tax that would impose taxes on net worth rather than income.

Democrats said that ProPublica’s report underscores the need for action to increase taxes on the rich, who have most of their wealth tied up in stocks and real estate. Gains in the value of investments are not taxed until the assets are sold. 

“The ProPublica story reminds us again why we need a wealth tax,” Sen. Elizabeth Warren (D-Mass.) said Tuesday. “People all across this country know that the game is rigged, but the ProPublica story just mashes that right in folks’ faces.”

• While progressives such as Warren, Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.) back a wealth tax, Biden has not offered a proposal on the topic. 
• Biden’s proposals to raise taxes on the wealthy include raising the top individual tax rate, raising capital gains tax rates for high-income households, and taxing capital gains at death.
• Moderate Democrats aren’t fans of a wealth tax, and it’s unclear how quickly any tax increases on the wealthy will be enacted.

The Hill’s Scott Wong and I have more here on Democrats’ reaction to the ProPublica report.

GOOD TO KNOW:

• The cryptocurrency industry is increasing its lobbying presence in Washington as it attempts to ease concerns from Congress and regulators about digital currency’s volatility, environmental impact and role in recent high-profile ransomware attacks.
• Fifty-five companies that didn’t pay any corporate income tax in 2020 shelled out $408 million on lobbying over the past six years, according to a new report from left-leaning watchdog group Public Citizen.
• Five former Treasury secretaries wrote a New York Times op-ed in support Biden’s proposal to strengthen tax enforcement.
• Chipotle executives on Tuesday said they raised menu prices by about 4 percent to make up for the company’s recent decision to give its workers higher wages. 
• Washington D.C.’s liquor board voted Wednesday to lift the last of coronavirus restrictions on bars and restaurants.