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White House signals possible shift in plan to hike taxes on wealthy, corporations as Sinema stands firm

The increases have been central to Democrats’ proposal to pay for their social safety net legislation.

WASHINGTON — Democrats are again grappling with how to pay for their multitrillion-dollar social safety net bill as Sen. Kyrsten Sinema, D-Ariz., remains opposed to raising taxes on the wealthy and corporations, three Democratic aides familiar with her position said.

The tax increases have been central to Democrats’ plan to pay for the legislation at the heart of President Joe Biden's "Build Back Better" agenda, the subject of intense negotiation.

But on a conference call Wednesday that included White House aides, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., Biden administration officials said the plans might have to shift, said a source familiar with the matter.

Details of the meeting were first reported by The Wall Street Journal and The Washington Post.

On the conference call, administration officials and Democratic leaders continued to discuss how to pay for the multitrillion-dollar legislation, including alternatives to increasing the highest income tax bracket and the corporate tax rate, said two people familiar with the call.

In addition to Schumer and Pelosi, Senate Finance Committee Chairman Ron Wyden, D-Ore., and House Ways and Means Committee Chairman Richard Neal, D-Mass., participated.

White House deputy press secretary Andrew Bates said in a statement Wednesday evening that Biden’s plan would be paid for in full.

“The President is working to pass game-changing investments in economic growth that benefits the middle class, paid for by having the richest taxpayers and big corporations pay their fair share and without raising taxes on any American making less than $400,000," he said. "The price tag for this legislation is 0. There is an expansive menu of options for how to finance the President’s plan to ensure our economy delivers for hardworking families, and none of them are off the table.”

The changes are intended to accommodate Sinema’s long-expressed opposition to the tax increases, said a person familiar with her thinking.

“There’s been no change in her position for a while,” a person privy to the negotiations said, adding that Sinema does not support an increase in carried interest, in the individual tax rate or in the corporate tax rate. “It’s getting down to the wire, and we need to think about how to move forward” without the tax increases.

Nothing has been decided, a source cautioned.

Sen. Joe Manchin, D-W.Va., who has forced Democrats to lower their price tag of the overall bill, wrote in a memo to Schumer that he supports increasing the individual tax rate to 39.6 percent and the corporate rate to 25 percent. Biden wanted to lift the corporate rate to 28 percent.

In separate meetings with House progressives and moderates, Biden began to refocus the policy provisions and what would be left on the chopping block, including tuition-free community college.

A plan to accommodate the lost revenue from meeting Sinema’s demands includes a variety of other ideas, such as a tax on billionaires’ assets and a new minimum tax on corporations, a person familiar with the details said. A second person said the discussions also include broader IRS enforcement to help to raise revenue.

Asked for comment about her stance on tax policy in the package, a spokesperson for Sinema said, “We aren’t confirming any of this but as always will let you know if that changes.”

Sinema has been in constant conversation with the White House about the legislation. But she might not be on an island. A senior aide to a moderate House Democrat said some lawmakers are “grateful that Sinema is stepping up to roll back some of these politically unpopular revenue raisers.”