Tax Increases, Bitcoin Values, and the Spending Bill
Tax Policy:
September 18: Biden pushes back at Democrats on taxes
President Biden is pushing to prevent congressional Democrats from scaling back his tax proposals, as lawmakers work on a $3.5 trillion social spending package aimed at advancing the president's economic agenda.
The White House and congressional Democrats both want to raise taxes on the wealthy and corporations and strengthen tax enforcement, to pay for investments in areas such as child care, health care, and climate. The tax proposals were front and center in a speech Biden gave at the White House on Thursday. Biden pushed back on Republican criticisms of his economic plans, saying GOP lawmakers would "Rather protect the tax breaks of those at the very top than give tax breaks to working families."
House Democrats are proposing smaller increases in the corporate tax rate and the top capital gains rate than Biden had. Additionally, the committee left out several of Biden's revenue-raising proposals, including those to tax capital gains at death and to increase the amount of information financial institutions report to the IRS about bank accounts.
"It's about the super-wealthy finally beginning to pay what they owe - what the existing tax code calls for - just like hard-working Americans do all over this country every Tax Day," Biden said in his speech Thursday.
At the same time, Biden has to get nearly every Democratic House member and every Democratic senator to vote for a final piece of legislation, and some moderates have already raised concerns about tax and spending proposals in House Democrats' bill.
September 15: Tax hikes to pay for Biden's economic plan approved by House committee
The biggest set of U.S. tax increases in a generation took a major step forward on Wednesday with approval by the House Ways and Means Committee of $2.1 trillion in new levies mostly focused on corporations and the wealthy.
The vote largely along party lines — there were no Republican votes in favor — brings President Joe Biden’s $4 trillion longer-term economic agenda one step closer to enactment. The tax package will help pay for the biggest expansion in social spending in decades, in a budget bill currently penciled in at $3.5 trillion.
While the committee agreed to key elements, including tax increases on businesses and the wealthy, an extension of refundable child tax credits along with a bevy of incentives for clean energy, differences remain with legislation being developed in the Senate. With slim majorities in both chambers, Democrats expect weeks of wrangling to smooth out the disputes.
Crypto News:
September 21: Bitcoin bounces to $43K ahead of fresh crypto comments from SEC Chair Gensler
Bitcoin bounced off $40,000 on Tuesday as attention returned to United States regulators. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $43,000 Tuesday ahead of fresh comments from Gary Gensler, chair of the Securities and Exchange Commission.
While traders remained cautiously bullish on the outlook, the shadow of Evergrande, put off by a public holiday in China, still loomed large over sentiment. “I am not too euphoric about this bounce,” popular trader Crypto Bullet summarized as part of his latest update. "Surely it's nice to see some strength by Bitcoin but overall it still looks bearish to me."
On the topic of China, analysts were adopting a longer-term approach, arguing that events such as the potential implosion of Evergrande were exactly the reason Bitcoin was created. Historical precedent buoyed the bull cause, with others noting that March 2020 delivered a springboard for new Bitcoin all-time highs after the initial collapse to $3,600.
Concerns such as exchange reserves rising on major exchange Binance were less of an issue.
"Yes, Binance's BTC balance is increasing, suggesting selling from China. However, for context, this has been a several-week-long trend and overall exchange flows remain neutral over the last few days," analyst William Clemente said as part of comments on the phenomenon.
Spending Bill:
September 21: Democrats to Pair Spending Bill With Raising Debt Ceiling
Top congressional Democrats announced on Monday that they would take a measure lifting the federal borrowing limit through the end of 2022 onto a bill to keep the government funded through December, escalating a brewing showdown with Republicans who have vowed to oppose legislation needed to avert a fiscal catastrophe.
"Addressing the debt limit is about meeting obligations the government has already made, like the bipartisan emergency Covid relief legislation from December, as well as vital payments to Social Security recipients and our veterans," the top two Democrats, Speaker Nancy Pelosi of California and Senator Chuck Schumer of New York, said in a joint statement announcing their plan.
Senator Mitch McConnell, Republican of Kentucky and the minority leader, has argued for weeks that it is the ruling party's responsibility to finance the federal spending it has endorsed, particularly as Democrats seek to maneuver trillions of dollars in spending around unified Republican opposition. "Democrats want to build a partisan future without our input, so Democrats will not get bipartisan facilitators for their purely partisan spending binge," Mr. McConnell declared on the Senate floor, adding that Republicans would support a stand-alone bill to keep the government open.
Democrats, who joined Republicans in increasing the limit during the Trump administration, argue that the G.O.P. should reciprocate under President Biden so the government does not default on its obligations.
In order to win enough support from moderate and conservative Democrats to begin work on the much larger, partisan package, Ms. Pelosi agreed to hold a vote on the Senate-passed $1 trillion infrastructure bill on Sept. 27. With a week to go before that vote, liberal Democrats are warning that they will block the passage of that legislation until work is completed on the $3.5 trillion package.
September 18:
Biden’s President Biden's $3.5 trillion Spending Plan
No president has ever packed as much of his agenda, domestic and foreign, into a single piece of legislation as President Biden has with the $3.5 trillion spending plan.
If successful, President Biden could delivers on a decades-long campaign by Democrats to expand the federal government to combat social problems and spread the gains of a growing economy to workers.
Ted Kaufman, a longtime aide to Mr. Biden who helped lead his presidential transition team, said the core of the bill went back much further: to a set of newsprint brochures that campaign volunteers delivered across Delaware in 1972 when Mr. Biden won an upset victory for a Senate seat.
Administration officials insist that even if the bill fails entirely, other efforts by Mr. Biden - including executive actions and bipartisan measures now awaiting House approval after clearing the Senate - have reasserted the United States' leadership on climate, competitiveness, and confronting China.