For the better part of two years, U.S. taxpayers have been hearing about more changes to federal tax law (over and above the numerous tax law changes resulting from responses to COVID-19).
Beginning with the 2019 primary elections, through the 2020 presidential campaign and into the early part of this spring with the release of President Biden’s Made in America and American Families Plan proposals, we’ve been learning about and tracking various income and wealth tax proposals. Currently, there’s a comprehensive bill exceeding 2,500 pages (subject to change at any time) on the table that was released by the House Budget Committee on September 27, 2021 that is currently awaiting further action in the House of Representatives.
With actual proposed statutory language to evaluate, Schneider Downs is pleased to introduce its dedicated webpage to Tax Reform 2021 – Build Back Better. Our goal for this site is to keep you updated on the proposed legislation being discussed in both the House and Senate. We want to provide details of the legislation and a balanced analysis of the potential impact on businesses and individuals. You’ll be able to access articles on various components of the proposals, along with documents and links to government sites that will provide easy access to the original source documents.
The 2022 budget resolution (S. Con. Res. 14) laid the groundwork for the Build Back Better Act (BBB) by providing the option of using the budget reconciliation process to pass the legislation.
Goals of the BBB as noted by the House Committee
- Cut taxes for the middle class;
- Create jobs;
- Lower costs for working families;
- Tackle the climate crisis and strengthen resilience;
- Ensure fiscal responsibility; and
- Stimulate future economic growth.
As we and other advisors have noted, the current proposal in the House will likely not be the same as the one that could ultimately be passed. The Senate still needs to develop its version of the bill. As the country has observed since the middle of September when the House Budget Committee approved a marked-up bill for the full House to approve, divisions in the Democratic Party need to be bridged. As we enter the last week of October, President Biden is partnering with both House and Senate Democratic leaders, who are still looking for an agreement on the size and scope of the BBB that would also pave the way for the separate bipartisan infrastructure bill to pass the House.
The negotiations impact the tax provisions contained in the overall legislation. Corporate, business and individual tax provisions are being revisited. For example, proposals to lower the proposed increase in the corporate tax rate, provide a larger state and local tax deduction, tax unrealized appreciation of investment assets, and introduce a new financial transactions tax on trading have been proposed. Negotiations are ongoing, as it is necessary for all 50 Democratic senators to pass the tax-and-spend legislation using the budget reconciliation process.
We’ll let you know “Our Thoughts On” Build Back Better; let us know yours, so we can help you plan for your future.
