Sen. Joe Manchin III urged fellow Democrats on Thursday to come together and gut the Trump-era tax cuts in the wake of bombshell inflation numbers.
The West Virginia Democrat told a local radio station in his home state that increasing taxes should be central to the Biden administration’s plan to combat inflation and rein in the deficit. In particular, Mr. Manchin called on Democrats to revise the 2017 Tax Cuts and Jobs Act passed by Republicans under former President Trump.
“We’ve got to get our financial house in order, get a tax bill that really puts us on a path to financial solvency,” Mr. Manchin told West Virginia MetroNews. “The only thing that Democrats agree on was that we all opposed the 2017 tax cuts, the way they finally came out and added $2 trillion of more debt … and with that, it went to the highest income earners.”
“So if we agree on that, can’t we put [a tax bill] together that truly gets our economy back on track?” he added.
Mr. Manchin said that Senate Democrats should use the budget reconciliation process, which allows some tax and spending measures to pass with a simple majority and avoids a filibuster, to repeal the Trump-era cuts.
As part of the effort, Mr. Manchin said Democrats should raise the corporate tax rate from 21% to 25%. He also endorsed raising the capital gains tax, which individuals pay when selling stock and other appreciating assets, and the creation of a 15% minimum tax on corporate profits.
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“You don’t need a punishing [tax code], you need basically a competitive [one],” said Mr. Manchin. “All the people at the top end of the food chain should be paying too, they’re not now in so many areas. You got corporations not paying.”
Mr. Manchin further suggested that Democrats should consider increasing taxes to shore up Social Security. Notably, he said that Democrats should raise the cap on taxable income that can be used to fund the retirement program.
At the moment, the federal government levies a 6.2% tax on income up to $147,000 to fund Social Security. Mr. Manchin wants to raise the cap to $400,000.
“You could raise it to $400,000 overnight,” he said. “I’ve got the will to do it, that’s all I can tell you because I’ve got grandchildren. Ten grandchildren. We’ve got future generations depending on us to do the right thing.”
The Bureau of Labor Statistics reported Thursday that inflation soared to 7.5% over the past 12 months, based on just-released January data. The climb in prices is the steepest since 1982.
Rising inflation is a top worry of Democrats as they face an increasingly difficult political environment for this year’s midterm elections. President Biden attempted to downplay the situation by saying that while inflation was causing “real stress” for families, there are “signs that we will make it through this challenge.”
“While today’s report is elevated, forecasters continue to project inflation easing substantially by the end of 2022,” he said.
Mr. Manchin, however, says the federal government should take swift action. Not only did he call on Democrats to hike taxes, but also urged the Federal Reserve to raise borrowing rates in hopes of cooling the economy.
“It’s time for the Federal Reserve to tackle the issue head-on,” Mr. Manchin said. “They can’t be pussyfooting around like they’ve been.”
Mr. Manchin has long called for gutting the Trump-era tax cuts, claiming they were too favorable to the rich.
The support has even stymied attempts by congressional Republicans to coax Mr. Manchin into switching parties after he single-handedly derailed Mr. Biden’s $1.75 trillion social welfare and climate bill.
“In calling for tax hikes, Joe Manchin is showing his true colors as a tax and spend Democrat,” said Dr. Mark Harris, the chairman of the West Virginia Republican Party. “West Virginians don’t want more taxes, and he needs to remember that he represents West Virginia, not Washington, D.C.”