Montana GOP pressures Tester vote no on Inflation Reduction Act

The tax, healthcare, climate, energy bill would establish 15% tax on large corporation profits
U.S Capitol CNN 061419
Posted at 7:11 PM, Aug 04, 2022

UPDATE Aug. 5, 2022 - Senate Majority Leader Chuck Schumer is expected to bring to the Senate floor Saturday a tax, healthcare, climate and energy bill after more than a year of negotiations.

While Sen. Jon Tester, D-Montana, will not confirm whether he supports the bill, Schumer said Democrats have the votes to pass the Inflation Reduction Act through budget reconciliation.

ORIGINAL STORY - Montana’s GOP legislative leadership and Sen. Steve Daines are pressuring Sen. Jon Tester to break with Senate Democrats and vote against a tax, health care, climate and energy bill.

Gov. Greg Gianforte said Thursday he also opposed the bill.

The proposed Inflation Reduction Act would establish a 15% minimum tax on large corporation incomes, give Medicare the power to negotiate drug prices and enhance clean energy incentives and tax credits. The Senate is expected to vote Saturday on whether to start debate on the bill. Democrats appear to have the votes to pass the bill after moderate hold out, Sen. Kyrsten Sinema, D-Arizona, struck a deal with Democrats to remove a provision of the bill to increase taxes on carried interests.

Tester hadn’t decided Thursday whether he would support the bill, his office said. Senate Democrats want to pass the bill through budget reconciliation because the process requires just a simple majority of 51 votes. Some parts of the bill may need to change to allow it to go through the reconciliation process. Tester’s office said he wanted to wait for the bill’s final text before taking a position.

In a Wednesday press call, Tester said he liked some sections of the bill, including a $300 billion deficit payment and some of the incentives to grow energy production.

“I think giving Medicare the ability to negotiate drugs is something I’ve been hearing about since my State Legislature days,” Tester said. “And it’s something the VA has done for a long, long time, and I think that could help lower costs for folks.”

In an Aug. 2 letter to the Montana Congressional Delegation, Montana State Legislature Senate President Mark Blasdel and Speaker of the House Wylie Galt, said the bill was a “reckless taxing and spending package.”

“Now is not the time for the federal government to saddle Montanans with higher taxes,” Blasdel said.

The U.S. Senate’s nonpartisan Joint Committee on Taxation expects the bill to raise taxes at about every income level. However, the Tax Policy Center said some benefits to low- and middle-income taxpayers are missing from the committee’s report, such as the extension of a premium tax credit for health plans under the Affordable Care Act.

Daines' Communication Director Katie Schoettler questioned why Tester wasn't leveraging his position as a moderate Democrat to push for something such as the Keystone XL pipeline, after Sen. Joe Manchin III, D-West Virginia, was able to secure a pledge of support from Democratic leaders and the White House for completion of a pipeline in his state. TC Energy abandoned the Keystone XL project in 2021. Prior to the company ditching the effort, Tester supported the pipeline and urged Biden to reconsider cancellation of its permit.

In an interview with MTN News Wednesday, Daines emphasized that Senate Republicans could kill the bill if one Senate Democrat voted against it. Daines highlighted the bill’s plan to increase IRS funding by about $80 billion over 10 years.

The budget surge would double the number of IRS agents to “go after small businesses and family farms,” Daines said.

A report by the independent nonpartisan Congressional Budget Office said the funding increase would return the audit rate to where it was 10 years ago and rise across all income levels, “higher-income taxpayers would face the largest increase.”

The report said the policies proposed by the Biden Administration focused on enforcement activity aimed at high-wealth taxpayers, large corporations and partnerships.

In 2018, Daines' net worth was estimated to be about $33 million. The IRS taking a closer look at the taxes of wealthy Americans was not why Daines opposed the bill, he said.

“Not at all, I disclose everything that I have, and my income as well, as part of being a member of the United States Senate,” Daines said. “I think everyone in Montana agrees you want to go after tax cheats, those who are abusing the code… Yes we need to continue to drive enforcement against cheats, but doubling the size of the IRS is going way, way, way too far.”

Tester's worth was estimated at $3 million in 2018.

The IRS workforce started shrinking in 1991 when the agency had 451 employees per one million U.S. residents, according to theTax Policy Center. Three decades later in 2021, the IRS had 237 employees per million U.S. residents.

Between 2010 and 2018, the audit rate for higher-income taxpayers fell, while the audit rate for lower-income taxpayers remained about the same, according to the report.

Without a funding increase, the Congressional Budget Office said audit rates are expected to continue falling over the next decade.

Editor's note: Updated with information on bill negotiations