In the budget request he released this week, President Biden proposed a new 20% minimum tax on the unrealized capital gains of households worth at least $100 million. It didn’t take long for Sen. Joe Manchin (D-WV) to shoot down the idea.
“You can’t tax something that’s not earned. Earned income is what we’re based on,” Manchin told reporters, adding, “Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned.”
Manchin has said that he backs the idea of tax reform that would roll back some of the 2017 Republican tax cuts. Democrats would need his vote in an evenly divided Senate if they seek to change the tax code using the reconciliation process to bypass the threat of a Republican filibuster.
The bottom line: The White House estimates that the minimum tax would raise $360 billion over a decade from the top 0.01% of American households (those worth over $100 million). But as with some previous Biden proposals to raise taxes, getting enough Democrats on board could prove difficult — and, and we noted earlier this week, the new minimum tax proposal would face a host of questions, likely including whether it violates the Constitution. “Manchin’s opposition means Biden’s proposal is likely dead only a day after the White House unveiled it,” The Hill’s Alexander Bolton wrote Tuesday evening.