President Biden recently proposed an increase in the capital gains tax for people who are making over $1 million a year. This tax would therefore apply to .3 percent of individuals in the United States. Revenue from this additional 20 percent increase would then be used to fund Biden’s $2.3 trillion proposals for additional healthcare and antipoverty funding, potentially including childcare, pre-kindergarten, and community college tuition assistance.
Since the Senate is currently at a 50-50 split, Biden needs the support of all Senate Democrats to be able to pass this proposal. However, moderate Democrats and those in divided states may be hesitant to approve this spending plan. For example, Senator Manchin (D-WV) has said: "If I don't vote to get on it, it's not going anywhere. So, we're going to have some leverage here. And it's more than just me, Hoppy. There are six or seven other Democrats who feel very strongly about this. We have to be competitive and we're not going to throw caution to the wind." Manchin is a proponent of pursuing more bipartisan proposals with fewer tax increases and lower budgets. Generally, in the 50-50 Senate, moderate Democrats have much more power in dictating Democratic policy, which may pose an interesting challenge to Biden now, and later on in his presidency.
- https://thehill.com/policy/finance/550315-white-house-defends-bidens-proposal-to-increase-capital-gains-taxes https://www.wsj.com/articles/capital-gains-taxes-are-on-bidens-radar-as-he-seeks-money-for-social-programs-11619192256
- https://www.forbes.com/sites/jonathanponciano/2021/04/25/manchin-insists-hes-not-a-roadblock-to-bidens-2-trillion-infrastructure-plan-but-blasted-proposed-tax-hikes/?sh=4bf8c75e28e0
- https://www.cnn.com/2021/04/05/politics/manchin-infrastructure-bill-tax-hikes/index.html
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