WHAT TO EXPECT: POTENTIAL TAX IMPLICATIONS OF A BIDEN PRESIDENCY
This information is current at the time of printing and should not be acted upon without the advice of a professional. This article originally appeared on
ksmcpa.com.
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s the Biden administration begins to execute plans, make announcements, and appoint Cabinet positions, there is much anticipation
about potential tax law changes and updates. While on the campaign trail, President Biden laid out a detailed tax plan. And on January 14, Biden announced his plans for additional economic relief in his American Rescue Plan Act. It’s important to note that none of these ideas have been proposed to Congress yet, nor have any currently applicable laws changed. Ultimately, the final tax plan that the President unveils as a prospective law may be much different from his initial campaign proposal. However, awareness of these ideas gives business owners a good
indication of what the new administration finds to be important and relevant.
American Rescue Plan Act
The American Rescue Plan Act (ARPA) is very broad. The plan incorporates several temporary components of the president’s tax plan. However, the
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majority of the potential provisions are not tax-fax-focused. Instead, the provisions are focused on coronavirus relief and vaccination plan rollouts. We will share more information and analysis in the coming weeks once there is legislative text that provides more detail.
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Biden Tax Plan
The Biden tax plan unveiled during the presidential campaign focuses on several components that could increase taxes for high-income earners. The proposedpr plan recommends increasing the highest tax bracket, imposes a new 12.4% Social Security payroll tax for wages over $400,000, eliminates the step-up in basis on death when assets are inherited, and removesoves preferential capital gains rates for taxpayers with o er $1,000,000 of income. However, the plan aims to help individuals with lower income by increasing the child tax credit and dependent care credit, as well as the earned income tax credit.
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The plan also repeals some of the business-focused initiatives passed as a part of the Tax Cuts and Jobs Act of 2017 (TCJA), including increasing the corporate rate to 28%, establishing a corporate minimum tax based on book income, and doubling the tax rate on GIL income from foreign corporations.
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CARRIERS & BROKERS
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