The difficulties facing Biden in his plan to raise taxes on the wealthiest

By Sahil Kapur - NBC News

WASHINGTON - The tax filing deadline for millions of Americans is this Monday, May 17, but lawmakers in Congress are still a long way from reaching a resolution on what to do about the steep tax increases that President Joe Biden is pushing for. .

Democrats, who have a slim majority in Congress, are still figuring out how to handle disputed domestic lawsuits and the threat of tough Republican opposition to okay new taxes to pay for the president's proposed infrastructure plan.

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Biden is operating in two ways to get the support of Congress.

On the one hand, he is emphasizing the great popularity in polls of his tax increases for corporations and people who earn more than $ 400,000 annually.

But he's also having talks with Republicans about a tighter package for roads and bridges, which

would be a bipartisan victory but would likely have to come without tax increases to fund them

.

The Democratic leader seems willing to try both: pass a narrow bipartisan infrastructure deal, then a separate Democrats-only package that raises taxes to fund clean energy programs alongside child and elderly care.

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But bipartisan talks so far have distracted Democrats from forcing a resolution on the sticking points among their own members, including how much to raise taxes and how to handle lawsuits per region, such as lowering the $ 10,000 deduction limit in state taxes and Locals (SALT).

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"Not only is there no consensus among Democrats in Congress, there is no consensus at the center," said Dan Rubin, a former senior adviser to the House Ways and Means Speaker.

“You have [Treasury Secretary Janet] Yellen telling Biden: spend, it won't hurt.

There are others who say no, no, no, this is going to hurt: the long-term effect.

You have politicians like Senator Joe Manchin.

You have the guys in New York saying that without SALT, there is no deal. "

Democratic strategists, anticipating a Republican political assault, are also weighing the impact that higher taxes on the nation's richest could have on their hopes of maintaining control of Congress after the 2022 midterm elections.

President Joe Biden in the Rose Garden of the White House in Washington, DC, Thursday, May 13, 2021.AP Photo / Evan Vucci

House Majority Leader Jim Clyburn said in an interview that Democrats "got the votes in the House" to pass Biden's spending plans - his $ 2.25 trillion jobs and infrastructure proposal. and its 1.8 billion program to expand the safety net for families.

But they are far from reaching a consensus on the fiscal side.

"I think we should pay as much as we can,

" Rep. Richard Neal, D-Massachusetts, said in an interview Thursday.

He did not suggest a dollar amount when asked whether the House of Representatives should aim for $ 1 trillion or $ 2 trillion or more in revenue.

"Nice try," Neal joked.

Progressives like Rep. Alexandria Ocasio-Cortez, D-New York, have rejected the need to pay for the plans and say tax increases should be sought for the wealthy and corporations to overcome inequality.

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Moderates like Manchin, D-West Virginia, argue that payments are essential.

And others say that the price should take into account the macroeconomic effects.

"We need to show fiscal responsibility and we have to be able to pay it," said Rep. Elissa Slotkin, a Michigan Democrat, who represents an undecided district that includes suburban Detroit.

Slotkin pointed out that funding mechanisms can stretch over many years, but that our "maths" must show.

Price uncertainty and political disagreements

Rubin, now a senior director at communications firm Glen Echo Group, said he would be surprised if Democrats could agree to more than $ 1 trillion in new taxes.

“I don't see that it is as much as people think.

The members talk big until they really have to go vote, ”he

opined, adding that House Democrats have had a tendency to demand payments in recent years.

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"You'd be surprised how many of our Caucus meetings were internally devoted to debating whether or not to pay our bills," he explained.

"A good part of our members would say: 'I will not vote for your bill, although it is a great bill, because it is not paid," he recalled.

Representative Brendan Boyle, D-Pennsylvania, a member of Ways and Means, argued that infrastructure spending has "a demonstrated return on investment" that should be factored into pricing.

"I don't think everything has to be 'paid for', as they say," he said.

Although most Democrats are not too quick to endorse or oppose Biden's tax proposals, some political disagreements have emerged.

Not all Democrats agree with Biden's claim to raise the corporate tax rate from 21% to 28%, something that would be a significant source of revenue.

Manchin has said that he supports a 25% rate.

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Others resist your urge to tax capital gains as ordinary income.

Others, like Sen. Mark Warner, D-Virginia, disagree with Biden's opposition to citizen fees.

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And a faction of Democrats in states like New York and New Jersey are insisting that any tax package lower the 2017 SALT limit, which primarily taxed the wealthy but hit the middle-income in areas with high property taxes, such as Long Island and the suburbs of New Jersey.

"The only red line for me is SALT," said Rep. Thomas Suozzi, D-New York.

"If we are going to change the tax code, we must fix SALT. Without SALT there is no deal."

"The people who make $ 150,000 where I live are middle class," he said.

Expanding the state tax deduction would counter the Democrats' goal of increasing revenue.

But party leaders cannot afford to lose the votes of Suozzi and his allies.

Attendees have discussed changes, such as removing the limit, increasing it, and doubling it for pairs.

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"It's going to be a continuous negotiation until the finish line,"

Suozzi said.

Senate Finance Chairman Ron Wyden, D-Oregon, said it is "very important" for Democrats to push for new taxes as a matter of "fairness" in their home states and districts.

"We have all these urgent needs: roads, bridges, childcare," he

argued. Americans “understand that after the pandemic, the government has a role. We have to find a way to make sure we have the resources. That is what makes this so crucial, ”he added.