A Final Bill Isn’t Imminent — New Confusion on Taxes
October 27, 2021
A Final Deal Isn’t Imminent — New Confusion on Taxes
October 27, 2021
IF YOU HEAR CHUCK SCHUMER OR NANCY PELOSI proclaim that a final tax and spending bill is close to enactment, don’t believe them.
THE DYSFUNCTIONAL DEMOCRATS are hopelessly deadlocked on several issues — including how to raise revenues to pay for nearly $2 trillion in new social spending; we reiterate that a billionaires tax may not be the answer.
DEMOCRATS WANT TO GIVE PRESIDENT BIDEN a victory ahead of his European trip, but he’ll be leaving town tomorrow without a final deal.
EVEN A VAGUE “AGREEMENT IN PRINCIPLE” is days away; a truly final deal, with completed legislative language, is probably weeks away.
THE LATEST CONTROVERSY is in the House Ways and Means Committee, which may have to re-write its tax proposal to accommodate last minute changes. But its furious chairman, Richard Neal, is balking at new proposals from Senate progressives that haven’t been vetted. Tax experts believe a billionaires tax would be a nightmare to enforce — and may unconstitutional.
OTHER DISPUTES PERSIST, including the insistence by Sen. Bernie Sanders that Medicare include vision, hearing and dental aid, which is on thin ice because Sen. Joe Manchin doesn’t want to pay for it. Other issues include the duration of paid leave, the shape of a corporate minimum tax, and whether to totally kill an attempt to have the IRS snoop into bank account activity (Manchin declared this dead yesterday).
UNLIKE THE TIGHT-LIPPED AND ENIGMATIC Sen. Kyrsten Sinema, Manchin seems to be relishing the attention — meeting nearly daily with Biden, trailed by a press corps that hangs Manchin’s every word, then dining with power brokers at Georgetown’s legendary Cafe Milano.
BOTTOM LINE: There’s a 40% chance this entire package could collapse, especially if there’s scathing scoring from the Congressional Budget Office. But we think there’s a 60% chance that a bill could come into focus within a few days, with a final package enacted later in November.
THEN IT WILL BE ON TO THE DEBT CEILING, which has to be raised in early December. Democrats think they can win public support in the debate over debt default — but after this chaotic fight over spending and taxes, the public sees incompetence in Washington, with Democrats justifiably getting most of the blame.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.