Lee, other moderates, urged to oppose tax increases on rich & corporate, but then Manchin makes it moot

By: - July 14, 2022 4:51 pm

“I don’t think tax increases would be popular,” Lee told Politico. “Let’s see what the Senate gives us.”

A New Jersey congressman is urging Nevada Democratic Rep. Susie Lee and a few other moderate House Democrats to help kill any prospective budget reconciliation bill that imposes new taxes on corporations or wealthy individuals.

Thursday there were multiple media reports that Democratic Rep. Josh Gottheimer had reached out to Lee and other centrist Democrats looking for support to scuttle tax increases on the rich and corporate reportedly included in budget bill talks between Democratic Senate Majority Leader Chuck Schumer of New York and West Virginia Democratic Sen. Joe Manchin.

“I don’t think tax increases would be popular,” Lee told Politico. “Let’s see what the Senate gives us.”

Lee is being challenged by Republican April Becker in Nevada’s third congressional district, in what both parties see as a very competitive contest.

The Biden administration’s Build Back Better legislation that Lee voted for last year included several provisions to raise taxes on corporations and individuals with income of more than $10 million.

For most of the current century, a staple position of most Democrats in Congress has been that corporations in particular have taken advantage of the tax code, and need to pay more.

Asked if Gottheimer had reached out to Lee about opposing tax increases on the rich and corporate in a reconciliation bill, Lee spokeswoman Zoe Sheppard would only say the congresswoman has been in contact with many fellow lawmakers about reconciliation, “and Gottheimer is one of them.”

Sheppard also pointed to Lee’s support for the Build Back Better legislation, and Lee’s opposition to new taxes for anyone making less than $400,000 a year.

Those are not the people targeted for increased taxes in current reconciliation bill talks. 

Budget reconciliation bills are the only means by which Democrats can circumvent the Senate filibuster and pass legislation in the Senate with only 50 votes plus a tie breaking vote from Vice President Kamala Harris. The tax measures Schumer and Manchin are negotiating, along with provisions to contain prescription drug costs and boost energy production, are remnants of the much broader and larger Build Back Better legislation that the Biden administration proposed and that Manchin did so much to thwart.

Gottheimer is also the founder of the “no SALT, no deal” caucus, a bipartisan group that wants to dramatically raise the $10,000 cap on state and local tax deductions, or repeal the cap altogether. As the name of the caucus suggests, it is keen to make a SALT provision a key condition of House passage in a reconciliation bill.

The state and local tax deduction cap is unpopular in states with high state tax rates, such as New Jersey, New York, and California. Members of Congress from such states successfully inserted a provision to expand the cap to $80,000 when the House passed the Build Back Better Act.

Lee is not a member of the “no SALT, no deal” caucus. Like many House Democrats, Lee voted for the Build Back Better bill despite the SALT provision, not because of it. When efforts to expand or repeal the SALT deduction cap have surfaced in separate legislation, she has voted against it.

What House Democrats do on taxes will likely be irrelevant, as the final details will hinge on what can pass the Senate. Arizona Democratic Sen. Kyrsten Sinema opposed corporate tax increases during the Build Back Better debate. And Thursday Montana Sen. John Tester, while not ruling them out, gave them the cold shoulder. By Thursday night, several media outlets were reporting that Manchin would not be supporting tax hikes on corporations or wealthy individuals.

This story was updated to reflect Machin’s remarks reported late Thursday.

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Hugh Jackson
Hugh Jackson

Hugh Jackson was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and author of the Las Vegas Gleaner political blog. Prior to moving to Las Vegas, he was a reporter and editor at the Casper (Wyoming) Star-Tribune.