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The Finance Committee is also leaning toward changing the rules that large business partnerships have used to avoid taxation and evade Internal Revenue Service audits. Congress drafted the rules when partnerships were dominated by small businesses, like doctors offices. But increasingly, partnerships are large companies or subsidiaries of major corporations, arrayed in complex, overlapping configurations to allow their owners to shift profits, losses and deductions to evade taxes.

Some 70 percent of partnership income now goes to the top 1 percent of earners, and the tax minimization methods have become so complex that ordinary I.R.S. agents are not allowed to conduct certain audits without the assistance of top-flight I.R.S. lawyers.

The constant theme running through our tax code is, paying taxes is mandatory for working people, but optional for wealthy investors and mega corporations. Thats especially true when it comes to pass-through businesses and partnerships, the preferred tax avoidance tools for those at the top, Mr. Wyden said.

To change all that, Democrats want to constrain partnerships from gaming the system. Under the new rules, if two partners who were members of a single corporate group sold a shared asset, the profit would have to be divided equally, not parceled out disproportionately to maximize tax advantages. Similarly, partnership debt, which allows partners to take deductions and claim cash distributions, could not be shuffled from partner to partner to reduce their tax liabilities.

Those changes, without any increase in tax rates, would raise $172 billion over 10 years, according to the Joint Committee on Taxation, Congresss official scorekeeper on tax matters.

Though it would raise less revenue, about $100 billion, the tax on buybacks could be the more far-reaching measure. Over the past decade, Apple has been the king of the stock buyback, spending $423 billion to retire its stock. Microsoft, in a distant second place, spent nearly $129 billion.

Some Democrats have favored setting the tax so high that buybacks would make no economic sense. But Democratic tax aides said on Thursday that they were trying to balance the desire to curtail stock buybacks with the need to raise revenue. At the very least, a 2 percent tax on buybacks could encourage companies to use excess cash to pay higher dividends, which shareholders pay taxes on.

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Democrats Eye Taxing Stock Buybacks and Partnerships - The New York Times

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Democrats may scuttle tactics used by the rich to pass wealth to heirs with little to no tax, part of a broader plan to raise money for an expansion of the U.S. safety net.

Specifically, the party is considering disallowing some complex trust-planning techniques used by wealthy Americans to avoid estate tax, according to a discussion list of potential tax reforms obtained by CNBC.

Congressional Democrats may also ask the Treasury Department to update regulations to "prevent the abuse of non-economic valuation discounts," according to the list. This concept applies, for example, to entrepreneurs who give a minority interest in their business to their kids at a discounted rate.

The reforms are largely aimed at multimillionaires or billionaires who use the strategies to remove wealth from their estate and transfer it to heirs tax-free, according to estate-tax experts.

"Basically, you've got this basket of loopholes that collectively can be used to defeat the estate tax at really any level, even billionaires," according to Robert Lord, counsel for progressive group Americans for Tax Fairness.

The list, a draft of ideas lawmakers assemble before formally pitching them in the House or Senate, doesn't contain many specifics. It identifies "grantor-retained annuity trusts" and "intentionally defective grantor trusts" as the trusts in question.

More from Personal Finance:Top 1% dodge $163 billion in annual taxes, Treasury saysStimulus payments triggered millions of IRS 'math error' noticesDemocrats may change the rules for 'mega' IRAs over $5 million

Interestingly, Democrats don't seem to be weighing reforms to the estate tax itself, such as a higher tax rate or a reduced asset threshold that would subject more estates to federal levies.

A 40% federal tax rate currently applies to estates and gifts valued at more than $11.7 million for individuals and $23.4 million for married couples.

That asset threshold will fall after 2025 even if Democrats don't touch it, due to sunset provisions in the 2017 Tax Cuts and Jobs Act. (Roughly $6 million and $12 million, respectively, would be exempt from the tax half the current value at that time.)

Sen. Bernie Sanders, I-VT, and Senate Majority Leader Chuck Schumer, D-NY, on Capitol Hill on Aug. 9, 2021.

BRENDAN SMIALOWSKI | AFP | Getty Images

The proposed estate-tax reforms are part of Democrats' broader theme of raising taxes on the wealthy to help fund climate, paid leave, childcare and education measures, the cost of which may be as high as $3.5 trillion.

President Joe Biden has said households earning less than $400,000 a year would not see a higher tax bill.

Some of the potential estate-tax reforms share elements of recent Democratic proposals, such as the "For the 99.5% Act" co-sponsored by several lawmakers like Sen. Bernie Sanders, I-Vt.

Critics argue the burden of some estate-tax reforms wouldn't only impact the rich but would extend to others like family farmers.

"Many Democrats love to talk about taxing the richest of the rich, but in reality, their proposals would hurt Main Street far more than Wall Street," Rep. Glenn Thompson, R-Penn., ranking member of the House Agriculture Committee, said of the various recent estate-tax proposals.

Let's look at grantor-retained annuity trusts, one of the techniques in question, as an example of how individuals sometimes use trusts to shield wealth from tax.

These trusts also known as GRATs have been leveraged by numerous millionaires and billionaires, including the Trump family, Facebook CEO Mark Zuckerberg, the Walton family (of Wal-Mart fame) and former Goldman Sachs Chairman Lloyd Blankfein. Casino magnate Sheldon Adelson, who died earlier this year, reportedly used the trusts to shield billions of dollars from tax.

Individuals often use the trusts to transfer assets that are expected to grow significantly in value, according to Charlie Douglas, a certified financial planner who runs a family office in Atlanta.

Generally, heirs benefit from tax-free appreciation and the owner reduces or avoids a federal estate or gift tax. (The concept is similar for the aforementioned intentionally defective grantor trusts and valuation discounts, Douglas said.)

Let's say an individual puts $1 million of stock into a GRAT with a term of two years. The stock grows 50%, or $500,000, over that period. The trust yields a double benefit: Heirs get the $500,000 growth without tax and the appreciation is removed from the owner's estate, thereby limiting or perhaps even eliminating tax the estate owes upon the owner's death. It becomes the equivalent of a tax-free gift. (The owner would get back the $1 million principal plus a small amount of interest.)

Tax experts say some gaming can also occur, whereby owners intentionally lowball the value of an asset (like real estate) placed in the trust. Heirs would get more tax-free wealth as a result.

The "For the 99.5% Act," a guide for how Democrats may be thinking of new rules, would restrict these trusts as a wealth-transfer tool.

The legislation would increase the amount of time assets must remain in the trust to a minimum 10 years a potential deterrent since tax benefits are lost if the owner dies before the end of the term. Asset appreciation would also no longer be 100% tax-free, for example.

However, these policies may not end up in a final Democrat bill, or may be significantly amended if they do.

"If anybody says they know what's going to happen, they're crazy," Douglas said.

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Democrats may rein in big estates without reforming the estate tax - CNBC

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Democrats push bill linking public transit to affordable housing - The Albany Herald

Democrats on the Ways and Means Committee are set to begin considering a huge chunk of their party-line bill on Thursday, yet are already privately predicting they'll end up getting strong-armed by the White House and Senate into taking the Medicare expansion championed by Sen. Bernie Sanders at the expense of the ACA.

And the angst on the left is more complicated than the typical progressives-versus-moderates dynamic it's the latest chapter in a long-running debate between those who want to focus on shoring up Obamacare and those who want to move toward a "Medicare for All"-style model. As both factions battle, the bulk of President Joe Biden's domestic agenda is hanging in the balance.

Im not going to be quietly sitting on the sidelines and watching all the people eligible for Medicare treated royally and the people who depend on Medicaid be neglected, House Majority Whip Jim Clyburn (D-S.C.) said, noting hes made Biden aware of his preference for solidifying an Obamacare Medicaid expansion aimed at low-income Americans, including minority communities in red states like his. Ill stand up to anybody with that position. I dont care who it is.

On its surface, the health care clash pits Sanders, the Senate Budget Committee chair, against House Speaker Nancy Pelosi and her leadership team, who are leading the charge to shore up the Affordable Care Act. Yet its roots go deeper: Senate Majority Leader Chuck Schumer, who never signed onto Sanders' Medicare for All bill, is in his corner for the current clash as the upper chamber digs in to defend its approach to the multitrillion-dollar social spending bill. Schumer touted a "robust and historic expansion of Medicare" to reporters on Wednesday morning.

While Pelosi and her allies also support the Medicare benefits a senior Democratic aide noted that theyve been part of the speakers drug bill for years they and several outside advocacy groups are pushing the party to prioritize the populations most vulnerable to prospective GOP rollbacks of the health law.

On Wednesday, Pelosi publicly downplayed the battle, saying "both will be present; thats not a problem." But behind the scenes, the House leadership camp argues that taking away benefits from seniors on Medicare would be more politically difficult for a future Republican Congress.

Meanwhile, the House progressive camp wants to spend significant money on expanding Medicare to cover vision, hearing and dental benefits for seniors. But despite the massive size of Democrats bill, theres not enough money in their pot to please everyone. Even the ambitious draft plan released by Ways and Means Chair Richard Neal (D-Mass.) Tuesday night, which a source close to the negotiations warned had not received White House or Senate buy-in, caused agita on the left.

That's because the Ways and Means proposal wouldn't fully phase in dental benefits until 2032. Progressives say theyve already compromised enough, arguing that they've already backed down on Medicare for All and lowering Medicare's eligibility age.

"We need to be 100 percent for universal health care, and we are so far from that today," said Rep. Pramila Jayapal (D-Wash.), the Progressive Caucus chief who is pushing for Medicare to cover more people with more generous benefits. "We need to recognize that while the ACA did many good things, just providing subsidies to private insurance is not the way to move forward."

The left's disappointment extends beyond the pace of the dental benefits roll-out, though negotiations are ongoing. Only half the cost of major dental procedures would be covered far less than the 80 percent some advocates had demanded. And many key expenses, like over-the-counter hearing aids, wouldnt be covered at all.

Rep. Lloyd Doggett (D-Texas), who chairs the Ways and Means subcommittee that will begin marking up the legislation on Thursday, is concerned that the limited coverage previewed Tuesday would put the new dental benefits out of reach for low-income seniors.

Its false hope for poor people, he lamented. They wont be able to use the service.

But while skimping on new Medicare benefits may anger progressives, it frees up scarce dollars for shoring up Obamacare and expanding Medicaid to cover 2 million uninsured people in red states that didn't expand their programs under Obamacare top priorities for Pelosi and House moderates, as well as progressives like Doggett who represent states that have refused to expand Medicaid on their own.

House leadership argues that the enhanced Obamacare subsidies Congress approved in March, which are set to expire at the end of next year, have to be made permanent given the likelihood that a future Republican majority could refuse to extend them later on. ACA supporters point to the fact that the temporary Obamacare enhancements were a major reason why the rate of uninsured people didnt soar when millions lost their jobs during the pandemic.

Im not going to pick among my children, said Rep. Diana DeGette (D-Colo.), referencing the different Democratic health components of the social spending bill. But we need to keep the ACA subsidies thats what is enabling millions of people to get health care coverage.

The House committee markups that will last through this week and next wont fully resolve the dispute. Not only does the full House still have to debate, amend and pass its bill, but the Senate where Democrats have a much slimmer majority and a more centrist caucus that will likely chafe at the Ways and Means approach will have its say in the coming months.

And the health care question is just one of many consequential policy battles Democrats will have to litigate quickly if they want to get the social spending plan to Bidens desk this fall, as planned. The ambitious legislation will try to encompass everything from paid family leave to action on climate and an overhaul of the nations immigration laws.

But the mounting tension over health care goals is pushing leadership to investigate every option. Aides to Pelosi this week embarked on a long-shot search for more sources of revenue or savings in addition to the hundreds of billions of dollars expected from the bill's bid to let Medicare negotiate the price of some drugs, according to two Democratic sources. If that pays off, it could allow more spending on both public and private insurance.

Yet most Democrats see inevitable and tough choices on how to spend the health care dollars on the table.

Im very much aware of the competing priorities here, and theyre all meritorious, Doggett said. But theres clearly not enough revenue to do all that needs to be done."

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Democrats reopen old health care wounds with $3.5T mega-bill on the line - POLITICO

A group of four Democratic congresswomen on Friday introduced a resolution condemning racism in the U.S. government and outlining relief for victims of racism 20 years after the Sept. 11, 2001, attacks.

Democratic Reps. Pramila Jayapal of Washington, Ilhan Omar or Minnesota, Rashida Tlaib of Michigan and Judy Chu of California announced the resolution on Friday evening to acknowledge the "hate, discrimination, racism, and xenophobia that Arab, Muslim, Middle Eastern, South Asian, and Sikh communities across America continue to experience two decades after" 9/11, according to a press release.

"We must fully condemn all manifestations and expressions of racism, xenophobia, discrimination, scapegoating, and ethnic or religious bigotry while also finally acknowledging the climate of hate that Arab, Muslim, Middle Eastern, South Asian, and Sikh communities have experienced in the two decades since September 11, 2001," the four congresswomen said in a statement.

Policemen and firemen run away from the huge dust cloud caused as the World Trade Center's Tower One collapses after terrorists crashed two hijacked planes into the twin towers, September 11, 2001 in New York City. (Photo by Jose Jimenez/Primera Hora/Getty Images)

They continued: "As we acknowledge that our own government implemented harmful policies that unfairly profiled and targeted Arab, Muslim, Middle Eastern, South Asian, and Sikh communities, we must also celebrate that these very communities have met these challenges with unwavering courage, strength, compassion, and resilience while uniting in the aftermath to advocate for civil and human rights work which continues to this day to benefit all Americans."

OBAMA 9/11 STATEMENT: AMERICA'S BEST CITIZENS STEP FORWARD DURING NATION'S WORST MOMENTS

Jayapal told Vox in an audio interview that after watching the 9/11 attacks on TV that she immediately thought, "What does this mean for people like me?"

"I had just become a U.S. citizen, but I think I was still very clear that I was an immigrant, that I was brown, that I was a woman," she said. "I had flashed through my head all the times in U.S. history where immigrants were targeted in very difficult times going back to the internment and other such times and I felt like everything was going to change for somebody that looked like me. That was the overwhelming thought in my head."

Less than two full months after 9/11, Congress passed the PATRIOT Act in what was praised as an effort to improve national security by giving federal law enforcement and intelligence agencies access to citizen's private records that the government hoped could help them find prospective terrorists. The law was later criticized for giving officials too much surveillance power over everyday Americans.

The Democrats do not name the PATRIOT Act in their press release but note that the FBI "and immigration authorities arrested and detained as many as 1,200 Muslims immediately after the September 11 attack, and none of these special interest detained people were ultimately indicted for terrorist activity."

9/11 REMEMBRANCE: NAVY SEAL WHO KILLED BIN LADEN WARNS ABOUT AMERICA'S GREATEST THREAT NOW

Between 2003 and 2006, the Federal Bureau of Investigation issued nearly 193,000 National Security Letters (NSLs), or documents requesting someone's personal information, but the agency only made one terror-related conviction based on those NSLs, according to the ACLU. The act, or Section 215, expired in 2020.

The new resolution calls for creating an "interagency task force" to review government surveillance policies targetting specific communities; holding hearings to discuss the findings of the task force; provide resources to organizations supporting victims of hate; and calls on the Secretary of Health and Human Services, the National Institute of Health, and the National Science Foundation to work together to determine the impact of government targeting and profiling.

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The measure has support from dozens of local and national civil rights and activist organizations.

"This resolution is a critical step in acknowledging the government targeting of our communities which predates 9/11 but exponentially grew afterwards. As we witness the devastating impacts of the wars on Afghanistan and Iraq, Congress must support community-based organizations who are leading movements to fundamentally shift the foreign and domestic policies at the root of this violence," Fatema Ahmad, executive director of Muslim Justice League, said in a Friday statement.

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Democrats introduce resolution condemning racism in government 20 years after 9/11 attacks - Fox News