Manchin Supports Tax Hike for Infrastructure

While progressives in the party are often frustrated with the West Virginia Senator, he is demonstrating yet again that he's no Republican.

NBC News (“Manchin calls for ‘enormous’ infrastructure package paid for with new taxes“):

Sen. Joe Manchin said Wednesday that he favors a large infrastructure package that would be paid for in part by raising tax revenues — a point of contention between the two parties.

“I’m sure of one thing: It’s going to be enormous,” the West Virginia Democrat, who is seen as a swing vote in a chamber divided 50-50, told reporters at the Capitol.

While he didn’t predict a price tag, Manchin said Congress should do “everything we possibly can” to pay for it. He said there should be “tax adjustments” to former President Donald Trump’s 2017 tax law to boost revenues, including by raising the corporate rate from the current 21 percent to at least 25 percent.

The tax benefits in the Republican law were “weighted in one direction to the upper end,” Manchin said. He also suggested an “infrastructure bank” paid for with revenues, potentially a value-added tax, that would be used for “rebuilding America.”

“I’m not afraid to look at other things,” he said.

Notably, Manchin said the Republican resistance to higher taxes was not a “reasonable” position in an infrastructure negotiation.

“Where do they think it’s going to come from?” he asked. “How are you going to fix America?”

Manchin’s position on taxes signals a significant division between the two parties that could nudge Democrats to pursue the same budget reconciliation process that they used for Covid-19 relief to pass an infrastructure bill if they cannot reach common ground with Republicans on how to finance it.

He’s apparently not a believer in Modern Monetary Theory, either, in that he does feel that we need to “pay for it” by collecting revenues rather than just printing more money. But there’s more than that at work here, I think.

In a Twitter conversation the other day, I pushed back at the notion from a prominent journalist that Democrats hate raising taxes but feel they have no choice because they favor a lot of public spending. I argued that, no, they actually saw taxing the rich as a virtue into itself as a means of leveling.

Manchin, a moderate, is less inclined in that direction that Elizabeth Warren or Bernie Sanders. But he’s very much in the “fair share” camp.

FILED UNDER: US Politics, US Senate
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Teve says:

    In a Twitter conversation the other day, I pushed back at the notion from a prominent journalist that Democrats hate raising taxes but feel they have no choice because they favor a lot of public spending. I argued that, no, they actually saw taxing the rich as a virtue into itself as a means of leveling.

    (Insert “why not both?” Meme)

    Anyway, what’s Joe going to do when McConnell filibusters it?

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  2. Moosebreath says:

    @Teve:

    “what’s Joe going to do when McConnell filibusters it?”

    Pass it through reconciliation?

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  3. Kylopod says:

    @Moosebreath: Reconciliation can only be used for one more bill this year.

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  4. James Joyner says:

    @Teve: Oh: that’s my position. It’s definitely about generating revenue, too. It’s just also about more than that.

    @Moosebreath: @Kylopod: If you can only use it twice, a $1.9 trillion “stimulus” and $3-4 trillion infrastructure bill would seem pretty good ways to use it from a Democratic perspective.

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  5. MarkedMan says:

    @Teve:

    (Insert “why not both?” Meme)

    Exactly. The entire society benefits from our governance and infrastructure, and the laws and regulations that make commerce possible. The powerful are able to hire agents to endlessly work the system in their best interests. This causes accumulation of the wealth generated in our system to the powerful. There needs to be a constant revamp of laws to overcome the inevitable march of the shelters and special benefits accumulate to the wealthy.

    I’ve often said that the end of the familial empires in the US (Rockefellers, DuPonts, etc) came about for one reason: the wealthy saw their counterparts being stood up against the wall and shot by peasants in Russia, and China, and Viet Nam and Cuba and so forth. The fear that they would be next caused them to let things like unionization and consumer protection laws go forward.

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  6. Neil Hudelson says:

    @Kylopod:

    True, but I don’t think there’s going to be another grand budgetary bill this year. Reconciliation can’t be used for HR1. I don’t think there’s going to be another stimulus, not with the prospect of a partially opened country by summer, and virtually fully opened by fall.

    It appears to me the Democrats’ priorities are aligned with the order of our existential threats:

    The most immediate and lethal threat: covid.
    Then the near-immediate and lethal threat: climate change. The infrastructure bill that’s taking shape is going to be a massive investment in decarbonizing our economy.

    And third, voting rights. Which is shaping up to possibly be the cause that reforms the filibuster.

    If all three are miraculously passed, I’m assuming that will be the end of legislating for the Biden era.

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  7. MarkedMan says:

    @MarkedMan: I should have added that I don’t think there is anything morally wrong with the wealthy trying to advance their personal interests. It is inevitable human nature and probably a net good. Even poor people do everything they can to give their kids an advantage in college admissions, or go to a relative to see if they can help them find a job. The problem occurs because benefits accumulate and without some mechanism of redistribution it inevitably leads to the unassailable wealth of a few. Unionization has served as a powerful leveler in the past, and it is a true free market solution endorsed by no less than Adam Smith himself, but by their absolute hatred of unions the Republicans have shown that their embrace of the “Free Market!” is merely a sham, a facade on the front of their true purpose – helping the wealthy retain power.

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  8. Sleeping Dog says:

    Given the way our economy is structured, a large amount of any economic growth that emanates from the infrastructure bill will accrue to the wealthy, so having them pay for it up front makes a great deal of sense.

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  9. Kylopod says:

    @James Joyner: @Neil Hudelson: I’m just a little puzzled because I’ve been hearing conflicting information about which will be the next bill to be passed through reconciliation. Manchin previously said he would not support an infrastructure bill passed through reconciliation. A few days ago it was reported that Bernie Sanders, as budget chairman, is pushing for a prescription drug plan to be passed through reconciliation. Maybe it’s Sanders going rogue a little, or just posturing, but my general assumption has been that he ain’t doing nothing without the coordination of the White House.

  10. KM says:

    Of course he supports it – it benefits his constituents in a really obvious, hard-to-justify-denying way.

    There’s no COVID stigma here, no conspiracy theories or economic bootstrapism to explain why The People shouldn’t use Their Tax Money to fix things clearly falling apart. Rural areas in WV *need* this quite badly since it ain’t getting done any other way; the evil Feds might get away with raising taxes but no R in WV’s state government is gonna let that go though easily. This is his chance to get big projects done (with his name on it, of course) and please business by giving them the infrastructure they need to thrive. As for the taxes part, that is also a no-brainer. The Trump taxes cuts gave a permanent cut to the ultra-rich while the schlub level cuts are due to expire in just a few years; in other words, taxes are ALREADY going to “go up” on regular people so why not take back the Trump cuts so we can “restore how it was”. If Manchin’s smart, he’ll play it as a restoration to when we were more prosperous or pre-COVID economics, not a tax hike so he can keep his conservative street cred and stay moderate.

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  11. gVOR08 says:

    In interviews Schumer has described a very consultative style of managing his caucus. He says he regularly meets with a leadership group that includes Sanders and Manchin and they collaboratively work out how to deal with problems. If this isn’t BS Manchin isn’t being told he must do thus and so, but being asked what he and others need to do to get to the joint goal.

    (IIRC in the intro to one interview it was mentioned that Schumer had a perfect 1600 SAT score.)

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  12. Daryl and his brother Darryl says:

    This is where rote repetition of labels annoys the f’ out of me.
    Actually paying for investments in the future, is the most Conservative thing you can do.
    There is NOTHING Conservative about giving your rich cronies a tax cut and watching the deficit explode as a result.

    In a Twitter conversation the other day, I pushed back at the notion from a prominent journalist that Democrats hate raising taxes but feel they have no choice because they favor a lot of public spending. I argued that, no, they actually saw taxing the rich as a virtue into itself as a means of leveling.

    And this is just complete bollocks. Democrats see problems that need solving and understand that those solutions take money. Since Reagan we, as a nation, have been unable to accomplish much of anything because all reasonable resources have been eliminated in order to give the wealthy tax cuts. Tax cuts that we were promised would generate revenues…like MAGIC!!!
    Now people like James see historically low tax rates as the norm, and any effort to get back to actually doing anything constructive for the country is seen as a Marxist takeover by those crazy Democrats.
    Fuq that noise.

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  13. Michael Reynolds says:

    @Neil Hudelson:

    If all three are miraculously passed, I’m assuming that will be the end of legislating for the Biden era.

    If all three pass, Joe can toss the mike to Kamala, put on his Ray-Bans and stroll off into history as a transformative president.

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  14. Kylopod says:

    @Michael Reynolds: Reminds me of a Howard Hawks quote that the definition of a good movie is “Three good scenes. No bad scenes.”

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  15. Michael Cain says:

    @gVOR08:

    …it was mentioned that Schumer had a perfect 1600 SAT score.

    So did I. Chuck and I are within three years of the same age, so took comparable SATs. My opinion then was that the most important part of getting to 1600, rather than something only “close to 1600” was finely honed skills at taking multiple choice tests.

    Several years back when I “retired” from my tech career and went back to grad school for an MA in public policy, I had to take the GRE (for some reason universities wouldn’t accept my 1976 scores). The exam is taken on a computer now. Many of the multiple-choice skills no longer apply. Eg, when I was young you skipped questions you weren’t sure of on the first pass, then came back and spent time on them later. The computerized GRE will not go on to the next question until you have answered the current one, and there is no way to go back and review your answers.

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  16. just nutha says:

    If y’all want to go with “insurance against being hung from lampposts” instead of “we should pay our share, too,” I am soooooooooo into that. Just sayin’.

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  17. gVOR08 says:

    @Daryl and his brother Darryl:

    There is NOTHING Conservative about giving your rich cronies a tax cut and watching the deficit explode as a result.

    By dictionary definition of conservative in general use, and per “intellectual” conservatism, that’s true. But I fear that as a matter of political “conservatism” as actually practiced over the centuries, no, that’s a very conservative thing to do.

  18. just nutha says:

    While I’m here, I”ll note how refreshing it is to see someone in Congress assert that we should pay for stuff. I realize MMT sez we don’t got to no more, but it also has no problem with the inflation that results. In essence, we pay for the borrowing by deflating the purchasing power of lower incomes.

  19. Daryl and his brother Darryl says:

    @gVOR08:
    Aye…that, for me, is the distinction between Conservatism and Republicanism.

  20. Flat Earth Luddite says:

    @just nutha:
    And of course, hammering the lower classes financially increases the odds of your inspecting your entrails draped over a tree limb.

  21. Teve says:

    @just nutha: MMT is a little more nuanced. I don’t 100% support it, but can you name me a country which issues its debt in a fiat currency it controls, which has defaulted?

    Also, FWIW, Modern Monetary Theory is a misleading name. It is not the mainstream Economics viewpoint.

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  22. Teve says:

    Also, MMT says government doesn’t have to tax, it can just print money, if inflation is low, like it currently is. They believe in times of high inflation, government should tax, as a way of reducing the money supply so prices can’t keep increasing.

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  23. Stormy Dragon says:

    @Kylopod:

    Reconciliation can only be used for one more bill this year.

    50 votes + the VP says you can reconcile all the bills you want.

  24. Stormy Dragon says:

    @Teve:

    MMT is a little more nuanced. I don’t 100% support it, but can you name me a country

    MMT may turn out to be wrong, but the Austrians who have been telling us that hyper inflation will kick in any moment now for the last 20 years are definitely wrong, so I don’t see the harm in trying something else to see what happens.

    Especially since, for all the hyperventilating, MMT is basically what we’re already doing. All that would change is how we understand why what we already do works the way it does.

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  25. Teve says:

    Maddow is saying today that GOP leadership has already told the Democrats that they’re not going for no liberal infrastructure bull crap but the Dems want this bad so they’re going to use Reconciliation.

  26. Just nutha ignint cracker says:

    @Teve: The issue isn’t default, it’s what happens at the lower end of the economic scale. Our inflation rate has been very low, but not so low that incomes in the bottom quartile (I would say bottom half, but that’s my inner Marxist talking) haven’t experienced a steady erosion of purchasing power to the point that even raising the minimum wage to $15.00/hr won’t bring people back to the purchasing power that they had even 10 years ago let alone longer.

    Remember the comment that you saw on Facebook where the young woman was lamenting that long ago a person could raise a family on the work from one job and how that’s been taken away? The whole “we don’t have to raise the money, we can just print it” thing that MMT proposes plays a role in her lament.

  27. Teve says:

    @Just nutha ignint cracker:

    The issue isn’t default, it’s what happens at the lower end of the economic scale

    You and I may understand that, but a lot of people don’t. People were worried that Italy was going to default, and MMT people were insisting that it never would, because its debt was all denominated in its own fiat currency.

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  28. Teve says:

    @Just nutha ignint cracker:

    Our inflation rate has been very low, but not so low that incomes in the bottom quartile (I would say bottom half, but that’s my inner Marxist talking) haven’t experienced a steady erosion of purchasing power to the point that even raising the minimum wage to $15.00/hr won’t bring people back to the purchasing power that they had even 10 years ago let alone longer.

    I’d have to see your police work on that, Lou. Eyeballing the last 10 years of CPI, inflation looks ~2%/year. That’s not going to lead to a massive erosion of purchasing power.

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