Sinema posing challenge for Democrats’ tax-hike plans: reports

Sen. Kyrsten Sinema (D-Ariz.) is opposed to raising tax rates on corporations and high-income households, prompting Democrats to consider paying for their social spending package in other ways, according to media reports.

The Wall Street Journal reported that Sinema has told lobbyists that she’s opposed to rate hikes, and as a result, Democrats are looking into crafting legislation that excludes those proposals.

The Journal reported that proposals related to increasing taxes on U.S. companies’ foreign earnings and strengthening IRS enforcement remain options for Democrats.

Sinema’s office did not immediately respond to an inquiry from The Hill about the senator’s position on taxes.

News that Democrats are reexamining how to pay for the social-spending package comes as lawmakers and the White House are also discussing which spending proposals to scale back or drop from the bill in order to shrink the size of the measure.

Sinema and Sen. Joe Manchin (D-W.Va.) have both said they want the package to be smaller than the $3.5 trillion figure called for in Democrats’ budget plan. But unlike Sinema, Manchin has indicated that he is willing to raise tax rates.

Democrats had been counting on tax-rate increases as a key way to pay for spending and tax cuts in areas such as child care, education and climate. The House Ways and Means Committee last month approved legislation that would increase the top individual income tax rate from 37 percent to 39.6 percent, raise the corporate tax rate from 21 percent to 26.5 percent and raise the top capital gains rate from 20 percent to 25 percent.

A spokeswoman for Ways and Means Committee Chairman Richard Neal (D-Mass.) said that Neal continues to support the panel’s proposed tax increases.

“He believes in the Ways and Means marked product, including changes to undo the 2017 Republican breaks to big corporations and individuals at the top,” Neal spokeswoman Erin Hatch said in a statement provided to The Hill.