Page 12 - Investment Advisor - October 2021

Beginnings

WASHINGTON WATCH

By Melanie Waddell

Budget Reconciliation Plan Likely to Include

Pared-Down Tax Measures

The push despite Sen. Manchin’s request to hit pause will continue to
move forward.

Crossmark Investments, said on Sept. 7
that the tax increase “of the all-Democrat-
ic reconciliation bill could take the form
of a hike in the top individual income tax
rate from 37% to 39.6%, the corporate
rate from 21% to 25%, and the tax rate on
capital gains from 20% to 28%.”
Manchin wrote in an op-ed in early
September for The Wall Street Journal
that “Instead of rushing to spend trillions
on new government programs and addi-
tional stimulus funding, Congress should
hit a strategic pause on the budget-rec-
hile Sen. Joe Manchin’s call September, “Let me be clear: the [bud- onciliation legislation.” A pause, Manchin
on Sept. 2 for lawmakers to get] legislation that Democrats are said, “is warranted because it will provide
W “pause” the budget recon- working on will be the largest tax cut more clarity on the trajectory of the pan-
ciliation process likely won’t delay its for the middle class in a generation.” demic, and it will allow us to determine
passage, the West Virginia senator and The bill will be paid for, Schumer whether inflation is transitory or not.”
other Democrats will demand a reconcil- continued, by asking the wealthy and Andy Friedman, founder and prin-
iation bill that includes pared-down tax corporations to pay their fair share in cipal of The Washington Update, told
measures — setting up weeks of debate. taxes. “Our goal is to have a joint pro- Investment Advisor in early September
Greg Valliere, chief U.S. strategist posal that House and Senate Democrats that he doesn’t think Manchin’s pro-
for AGF Investments, told Investment can all support,” Schumer said. “We’re nouncement “will affect the ultimate
Advisor on Sept. 8 in an email that, for working well toward that goal. There are passage of the legislation,” and that
instance, the top corporate rate “won’t some disagreements, but I am pleased Manchin “is trying to set the parameters
be 28%,” and the capital gains rate “will with the progress we’re making” in the of the upcoming reconciliation debate
not be set at ordinary income.” However, House, Senate and White House. by signaling that the proposed spending
“President Joe Biden’s tax proposal to Raymond James’ analysts opined in an amount is too large.”
eliminate the ’stepped-up basis‘ on prop- early September email briefing to “expect Manchin continued in the op-ed that
erty transferred at death, ’will stay.’” a broad range of policy proposals in the “while some have suggested this rec-
House Majority Leader Chuck days and weeks ahead,” especially applica- onciliation legislation must be passed Al Drago/Bloomberg
Schumer, D-N.Y., however, promised ble to the tax and revenue conversations. now, I believe that making budgetary
during a press conference in early Bob Doll, chief investment officer at decisions under artificial political dead-

10 INVESTMENT ADVISOR OCTOBER 2021 | ThinkAdvisor.com