Bank reporting proposal removed from Democratic spending package

Kayla Tausche joins the 'Halftime Report' with news from Capitol Hill, where sources tell her a controversial proposal is out of the president's spending bill. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

With just one day left before President Joe Biden departs for a week of summits in Europe, Democrats in Congress were still deep in negotiations Wednesday over several key pieces of the president’s social safety net and climate bill.

But there were some visible signs of progress. One issue gaining clarity was taxes.

On Tuesday, three Democratic senators introduced a plan to impose a 15% minimum tax on corporate book income, which would apply only to companies that reported over $1 billion in income for three straight years.

The plan quickly garnered approval from two key centrist Democrats in the Senate: Kyrsten Sinema of Arizona and Joe Manchin of West Virginia.

Yet even as Democrats coalesced around the 15% minimum corporate tax, two other proposed tax changes appeared to be headed for the chopping block.

A plan to have banks report cash flow information to the IRS for accounts with more than $10,000 in non-wage deposits was no longer under serious consideration midday Wednesday, CNBC’s Kayla Tausche reported, citing three sources familiar with the matter.

But on Wednesday afternoon, Rep. Richard Neal, chairman of the powerful House Ways and Means Committee said the bank reporting plan was being “reworked” to apply only to people who make more than $400,000 a year.

The invisible line between individuals making under $400,000 a year and those making over that is an important one to Biden. The president has repeatedly pledged that nothing in this bill would raise taxes on people “making less than $400,000 a year.”

Another late-breaking proposal to tax the unrealized market gains of the very richest Americans – people reporting more than $100 million of income or holding more than $1 billion in assets – also appeared to be on shaky ground Wednesday.

Manchin told reporters he thought the plan was “convoluted,” yet he added that people who have grown extremely wealthy in the United States should pay an additional “patriotic tax.”

White House press secretary Jen Psaki said Biden “supports the billionaire tax” on Wednesday.

Potential sources of revenue to pay for the bill received new attention this week after Sinema announced in mid-October that she would not support a long-standing plan to generate revenues by raising the corporate income tax rate and the top individual tax bracket rate.

Democrats need all 50 senators in their caucus to pass any bill, so Sinema’s announcement left the party scrambling.

Another sign of progress Wednesday occurred in the House, where a Senate-passed bipartisan infrastructure bill is languishing until a key bloc of progressive Democrats agree to vote for it.

The progressives have so far said they will not back the infrastructure bill until the Senate writes and ostensibly passes the other half of Biden’s domestic agenda, the social spending bill. To become law, that bill will rely on a complex legislative process known as budget reconciliation.

On Wednesday, House Speaker Nancy Pelosi announced the first step in this reconciliation process, a hearing in the House Rules Committee on Thursday to establish the specific steps and timeline for considering the reconciliation measure.

At the time Pelosi wrote this, however, there did not yet exist an actual social spending bill for the House to consider. While many of the agreed-upon pieces of the legislation had already been drafted in standalone form, the thorniest issues were still being negotiated, and cannot be drafted until they are resolved.

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Видео Bank reporting proposal removed from Democratic spending package канала CNBC Television