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Good Thursday morning. We've almost made it. Tips, comments, recipes? Reach out and sign up. <a href="https://subscribe.washingtonpost.com/newsletters/#/bundle/powerup?method=SURL&amp;location=ENL&amp;initiative=MR_powerup">This is the Power Up newsletter</a> – thanks for waking up with us.&nbsp;

TAX ON, TAX OFF: How Democrats will pay for their $3.5 trillion budget reconciliation package currently being drafted by House Democrats might be just as contentious of a fight as the one over the policies they'll ultimately foot the bill for.&nbsp;

Members of the Senate Finance Committee will meet today to review over two dozen tax proposals as the panel works to figure out how to cover the ambitious social spending bill, according to a source familiar with the negotiations. At the same time, the House Ways and Means Committee will start their markup of the massive legislative undertaking tomorrow. It remains unclear what potential revenue-raisers Ways and Means Chair Richie Neal (D-Mass.) will ultimately put forward.&nbsp;

Nevertheless, an army of lobbyists and special interest groups making their case against tax increases — or for the status quo — have mobilized, and former Democratic lawmakers who have cashed out on K Street have <a href="https://www.wvgazettemail.com/opinion/op_ed_commentaries/nick-rahall-dems-need-to-avoid-isolating-policies-opinion/article_839a1065-db38-5e59-aefa-bb3c29fec805.html">penned their op-eds.</a> The pay-for fight is bound to further expose the moderate-progressive schism and comes on the heels of a report released by the Treasury Department this week that found that the wealthiest 1 percent of Americans are failing to pay an estimated $163 billion in taxes every year.&nbsp;

Our Theo Meyer obtained the list of potential revenue provisions being chewed over in the Senate last week, which includes a range of corporate, individual, and tax gap proposals. A number of the provisions included on the list mirror what the Biden administration has already called for, like reinstating the 39.6% top ordinary tax rate next year. And Senate Finance Chair Ron Wyden (D-Ore.) has already begun socializing some of the other policies listed:&nbsp;

Tom Brenner

What else is on the list? Some of the ‘tax gap’ provisions being considered include increased funding for IRS enforcement against wealthy taxpayers and banks. A measure beefing up tax law enforcement was excluded from the bipartisan infrastructure bill passed by the Senate after Republicans learned that Democrats were already planning to add an enforcement proposal into the reconciliation bill.

The Senate Finance Committee is also weighing a “mark-to-market for billionaires” measure that would require them to pay capital gains taxes each year as their publicly traded assets appreciate.&nbsp;

“This proposal would apply to an estimated 600 people and raise hundreds of billions,” according to the document.

They're also considering a policy change to “mega retirement accounts” — individual retirement accounts with over $5 million — that would “require taxpayers to distribute retirement account balances that exceed certain thresholds,” per the document.

‘Deadly politics’ or not? It's not the proposed “plastics excise tax” that's been rocking the boat, but tax increases aiming for America's wealthiest — closing the carried interest loophole and proposed estate and capital gains tax changes — that have elicited the most pushback so far.&nbsp;

Former West Virginia Congressman Nick Rahall (D) <a href="https://www.wvgazettemail.com/opinion/op_ed_commentaries/nick-rahall-dems-need-to-avoid-isolating-policies-opinion/article_839a1065-db38-5e59-aefa-bb3c29fec805.html">penned an op-ed</a> in the Charleston Gazette (paging Sen. Joe Manchin III) arguing against the capital gains step-up in basis at death: “Some in Congress believe this will only affect wealthy people and fix a loophole to ensure the rich pay their fair share,” he wrote. “In actuality, it would force small businesses and family farms to pay a 43.4% tax on inherited assets and a 40% estate tax. That amounts to a 83.4% tax, a punitive measure that small businesses simply can’t afford, especially now.”

Heidi Heitkamp, the former Democratic senator from North Dakota turned lobbyist, told the <a href="https://www.nytimes.com/2021/09/07/us/politics/biden-tax-increases.html">New York Times's Jonathan Weisman, Alan Rappeport, and Jim Tankersley earlier this week</a> that “taxation upon death, regardless of wealth, is deadly politics.”

“Heitkamp said she was finding a receptive audience among potential swing voters in rural areas, especially owners of family farms, even though Democrats say such voters would never be affected by the changes under consideration. Lobbyists already expect this piece of the estate tax changes to wash out in the lobbying deluge.”

“There is a big divide in the caucus in the [Democratic] caucus on how they view revenue,” a Democratic lobbyist told Power Up. “The thing moderates keep trying to say to the White House is that you should talk about taxes and the tax code as a way to not level the playing field but to reintroduce ‘fairness’ into the tax code, and the way progressives talk about it makes a lot of people talk about it as a punitive thing — and thats how the business community views it.”&nbsp;

A spokesperson for the Senate Finance Committee pushed back on the argument that these proposals are political losers, pointing to former president Trump, who in part campaigned and won the 2016 election by promising to stop letting hedge funds get “<a href="https://www.reuters.com/article/us-election-trump-hedgefunds/trump-says-tax-code-is-letting-hedge-funds-get-away-with-murder-idUSKCN0QS0P120150823">away with murder</a>” and close the carried interest loophole.&nbsp;

“The GOP position on taxes was previously a political loser… [Trump] recognized that this is about millionaires and billionaires playing by a different set of rules,” said the spokesperson.

“These are strong measures that are facing an onslaught of well-funded, high-powered opposition from very powerful lobbying forces,” Robert Greenstein, the founder and former head of the nonprofit Center on Budget and Policy Priorities, wrote in an email. “The misleading but too-widely-believed claims about how the capital gains at death provisions would affect family farms are a case in point, as is the opposition being mounted to strengthening IRS enforcement, which simply aims to ensure that more people pay the taxes they owe under the law.&nbsp;It will take courage for many members not from safe districts or states to support some of these provisions, but it’s the right thing to do for the country, in my view.”&nbsp;

Andrew Harnik

THE DOJ STRIKES BACK: “The Biden administration is preparing to sue Texas over its new law banning most abortions … an action that would set off a federal-state clash at a time when the future of abortion rights becomes an ever-more-pressing question before the courts,” <a href="https://www.wsj.com/articles/biden-administration-prepares-to-sue-texas-over-abortion-law-11631151641?mod=hp_lead_pos2">the Wall Street Journal’s Sadie Gurman first reported</a>.&nbsp;

“The Justice Department could file a lawsuit as soon as Thursday … [and] is expected to pursue an argument that the Texas law illegally interferes with federal interests.”

But legal experts have warned “that novel provisions in the law, which prohibits most abortions after about six weeks of pregnancy, could make it harder for the federal government to prevail in a lawsuit.”

The DOJ’s (possible) plan of action: “Prosecutors could bring criminal charges under civil rights measures originally written to root out the Ku Klux Klan,” <a href="https://apnews.com/article/joe-biden-health-texas-us-supreme-court-laws-dafed312ccd8bec12b87dc6a8c13bba9">AP News’ Lindsay Whitehurst and Michael Balsamo write</a>. “Those say that private citizens working with the state to deprive people of their constitutional rights could face criminal violations.”

BIDEN’S CONFUSING GLOBAL VACCINE RESPONSE: On Wednesday, <a href="https://www.washingtonpost.com/nation/2021/09/08/covid-delta-variant-live-updates/#link-4I2WWWTMOVGZLJKJI3OUOPVULM">our Post colleague Dan Diamond scooped</a> that President Biden plans to call for a global summit on vaccine supply during this month’s United Nations General Assembly meetings. “Topics would include coordination among leaders worldwide to collectively tackle the health crisis and address inequities, including that the developing world has lagged behind on vaccinations.”

The move comes after global health advocates have “pressed the White House to convene a summit, laying out a framework for responding to the crisis and saying that the United States needed to take a central role in rallying the world.”

But it also comes as the Biden administration faces criticism for rolling out booster shots while much of the global south, like Tanzania and Chile, remains unvaccinated, according to the University of Oxford’s <a href="https://ourworldindata.org/covid-vaccinations">Our World in Data project</a>.&nbsp;

“The World Health Organization asked wealthy countries to hold off on administering booster shots for healthy patients until at least the end of the year as a way of enabling every country to vaccinate at least 40 percent of their populations,” <a href="https://www.nytimes.com/2021/09/08/health/covax-global-covid-vaccine-boosters.html">the New York Times’&nbsp; Benjamin Mueller and Daniel E. Slotnik report</a>.

“I will not stay silent when the companies and countries that control the global supply of vaccines think the world’s poor should be satisfied with leftovers,” Tedros Adhanom Ghebreyesus, the World Health Organization’s director general, <a href="https://twitter.com/WHO/status/1435617167559512065?s=20">told reporters Wednesday</a>.

Juan Carlos Llorca

🚨: “Immigrant children housed at one of the Biden administration's emergency shelters were burned after bathing in scalding water, had their blood drawn without explanation, and were repeatedly threatened with deportation, according to a new whistleblower complaint,” <a href="https://www.buzzfeednews.com/article/adolfoflores/fort-bliss-immigrant-children-shelter-whistleblower?ref=bfnsplash">per BuzzFeed News’ Adolfo Flores and Hamed Aleaziz</a>.&nbsp;

“It’s the third and latest complaint to come out of Fort Bliss, an army base near El Paso, Texas, which houses thousands of immigrant children who crossed the border without their parents.”

“While at the Pennsylvania International Academy facility, the whistleblower learned that many children suffered from dehydration, developed gastrointestinal issues, and refused to eat the food provided because it was inedible or unfamiliar.”

“The federal employee also said a floor set aside for children who had tested positive for the coronavirus was understaffed, crowded, and had a gas leak.”

“Nearly every child who met with the mental health team was also concerned that they had not yet seen a case manager who works on getting them released to a sponsor, such as a family member or friend in the U.S.”

THE AFTERMATH OF A WOMEN'S RALLY IN KABUL: “After being shut out from the Taliban‘s new government, women increased pressure on Afghanistan‘s new rulers with a number of protests Wednesday, at least one of which was broken up by Taliban fighters who whipped some of the demonstrators and arrested local journalists,” the <a href="https://www.latimes.com/world-nation/story/2021-09-08/women-protest-against-taliban-responds-with-force">Los Angeles Times's Nabih Bulos and Marcus Yam report.&nbsp;</a><a href="https://www.latimes.com/world-nation/story/2021-09-08/women-protest-against-taliban-responds-with-force">&nbsp;</a>

“A video posted on social media showed a Taliban fighter whipping one of the demonstrators as several women screamed and hurried away. The Times verified the location where the video was taken. Two Afghan journalists were taken to a police station and beaten with pipes and rifle butts.”

<a href="https://twitter.com/NMAAHCdirector/status/1435725033826050059?s=20">View tweet in browser.</a>

Harvard University, BA IN Government

Jacqueline Alemany is a Congressional Investigations reporter for The Washington Post. Previously, she was the author of The Early 202, The Post's flagship early morning newsletter featuring news critical to the nation’s many power centers. Alemany is also an on-air contributor to NBC News and MSNBC.

Jacqueline Alemany

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Democrats and lobbyists spar over tax increases in $3.5 trillion budget package

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