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Senator Sinema Listen To Senator Manchin On Taxes, He Speaks Wisdom!

JimofPennsylvan

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Senator Kyrsten Sinema should take a pause on Senator Joe Manchin's renewed call for Democrats to change certain elements of the tax code and review her position on these issues because Senator Manchin is right on the policy plus after these upcoming November elections Democrats will very very likely not have a chance to make these changes for another six years because they will lose one Congressional chamber this year and the Presidency in 2024 because Democrats are dead wrong on inflation the BBB act is not the answer for inflation, attacking specific causes for inflation in a practical manner is!

Senator Manchin is calling for raising the corporate tax to 25% from 21%, raising the top capital gains rate from 23.8% to 28% and treating carried interest income of private equity managers as earned income. Senator Sinema has said on the tax issue that her goal is to make the U.S. more competitive and create jobs; well Senator getting rid of or significantly reducing the current instability and unpredictability about Federal taxes and how will Washington change the code will go along way to helping the business climate and creating jobs in America. The only reason that the 2017 Tax Reform law lowered the tax rate to 21% instead of 25% was because of President Donald Trump was the President he wanted the Reform law to be a standout law it had to be Trump Tax Reform bigger and better that what was done in the past; meaning a lot of Republicans support a 25% tax rate so if it is changed it will likely long-term stay twenty-five percent. For individual federal tax rates the top bracket is 37% when one considers that the Medicare tax rate for this bracket is 2.35% and that approximately a third of the states have an income tax for this bracket at 6.5% or higher which means, this group is paying over forty-five percent of their earned income in taxes that is not including local tax rates which many locales have this taxing level is at the brink of being unfair to this group of American yes they have very high incomes so there is a fairness perspective to having this group pay more in taxes but there is a limit to this principle and certainly if the government is taking about half of what one makes it breaches this principle it is no longer taxation it is a broken system of raising revenue by the government. The overall point here is if the Federal government raises the capital gains rate on these top brackets from 23.8% to 28% this will largely suffice to say that the wealthiest are paying their fair share of taxes overall (the country has to be careful about raising the capital gains rate any higher because it will then likely hurt capital raising in the country as these wealthy people pursue safe fixed income investments because the high tax rates diminishes the benefit of taking investment risks), society really doesn't want to raise this 37% tax bracket because it is wrong and unfair and the people that are hit by this tax have the means to pour money into politics to get it changed and the conflict and the political distortion generated by this fighting back does the country no good at all!

Senator Manchin is spot on right that carried interest of private equity managers the percentage of revenue they get from these businesses that the private equity funds owns is earned income not capital gains or dividends these managers are getting these monies for management and investment services they provide to the fund for the owned business they oversee. It is basically just recognizing and acknowledging the truth here the tax law drafters could fine tune things here by saying that the monies the managers don't take or substantially reinvest but keep in reserve accounts to pay clawback actions if the fund doesn't meet its investment goals than that money won't be taxed as long as it is being kept in reserve and the amount in this reserve is reasonable.

Senator Sinema is right on the fifteen percent minimum tax provisions. The law should be changed to include this reform. First, this would meet the country's international obligations. Secondly, the country and the world needs to avoid this development where domestic corporations are doing all this maneuvering and changing operations to lower their tax bill by making income foreign income; doing this minimum tax deal really helps to stop all the gamesmanship that could break out to lower tax bills because corporations wherever they go will at least pay fifteen percent. Senator Joe Manchin is really failing his Party and his country on one issue. The child tax credit paid out during the year that was created last year brought a lot of people out of poverty there was a lot of practical benefit for those low income families just keeping their head above water, this tax credit wasn't renewed for this year and it is having a palpable effect in the nation. There is one glacier size problem with this tax credit people don't have to work to get it so this tax credit compounds the problem the country has with a worker shortage which is fueling dangerous inflation people are just staying home and waiting for this money to drop on their debit card. Senator Manchin could lead the country to a solution on this issue he should champion this child tax credit with the condition people have to work to get it unless they cannot work for health reasons or they are going to school, the Senator could lead his caucus here because if Democrats renew the program without the work mandate and inflation continues to be a problem Republicans are going to use this program as a stick and beat the Democrats into the loss column at the midterm elections in part by using this leverage. Senator Manchin could get this program renewed in a responsible manner because otherwise it is hard to see the Democrats passing a reconciliation bill, one that moves the country significantly forward, when doing so fails to lift twenty plus percent of the people in poverty out of poverty simply by renewing this program!
 

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