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The Manchin deal should fail. But Republicans can learn something from it.

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28.07.2022

Republicans are right to oppose the new tax hike and climate spending deal from Sen. Joe Manchin III. That doesn’t mean there aren’t things they can learn from the West Virginia Democrat’s effort — especially when it comes to raising taxes.

The deal appears to be yet another liberal bait-and-switch. It pledges to raise more revenue than it spends for climate and energy programs, but the scant details on the package do not inspire confidence. Almost all of the deficit reduction will come from two nebulous sources: money saved from Medicare drug price negotiation and raised from increased enforcement by the Internal Revenue Service. Those could be considerable, or they could amount to little or nothing. If those sources don’t deliver, this bill is simply a paid-for spending hike.

Manchin’s main tax hike — levying a 15 percent minimum tax on large corporations — will also likely be less lucrative than it looks. Businesses will fight it tooth and nail, and they have the resources to find ways to get around it should they fail. Again, specific details are lacking, but the bill reportedly intends to use reported earnings rather than taxable income as a baseline for levying the minimum........

© Washington Post


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