President Joe Biden’s plan to tax unrealized capital gains ran into opposition from key Democratic Senator Joe Manchin, likely dooming it just hours after it was sent to Congress.
Biden’s fiscal 2023 budget request released Monday would impose a 20% minimum tax on the unrealized capital gains for households worth at least $100 million.
Manchin said the idea is a “tough one.”
You can’t be taxed “on things you don’t have,” he said. “You might have it on paper. There are other ways for people to pay their fair share, and I think everyone should pay.”
The concept of taxing unrealized gains has been popular in progressive circles for years, but Biden shied away from it during the presidential campaign and during his first year in office. The proposal would raise an estimated $360 billion over a decade from roughly the wealthiest 20,000 households in the country.
Manchin’s early opposition comes as Senate Finance Committee Chairman Ron Wyden said he wants to hold hearings to build support for Biden’s proposal. Manchin’s support would be needed to ram the new tax through the 50-50 Senate using a budget procedural maneuver to bypass a Republican Senate filibuster.
The West Virginia senator also said he doesn’t support Biden’s proposal to end fossil fuel tax breaks.
Still, Manchin said he would like to re-engage with the White House on legislation focused on climate incentives, prescription drug cost reductions and other tax increases on the wealthy and corporations, if the package also reduces the deficit. But he’s had no discussions with the Biden administration.
“So we’re looking to see if anybody wants to talk,” he said. Manchin said he has heard talk about trying to get a deal done by July 4 but the key now is to agree on “parameters” of a package.
“I’m not saying anything’s going to be done,” he added.
— With assistance from Laura Davison
