The Build Back Better Bill Part II

The Treasury Department detailed the Biden Administration’s new tax provisions in a budget proposal Greenbook yesterday. The changes include tax increases on wealthy taxpayers and middle income corporations, as well as more handouts to the poor.

The major changes proposed include…

1 – An additional Medicare Tax on S Corps, Partnerships, and Sole Proprietors with more than $400K in income on their personal returns. The proposal would not only add the existing Net Investment Income Tax to these earnings, but also increase it another 1.2% to a total of 5%.

2 – It creates a global minimum income tax on the foreign income of multinational corporations.

3 – It provides for a further expansion of the Earned Income Tax Credit to workers without children. It includes an end to the phase-in rules and ties increases in the credit directly to inflation. The proposal also eliminates the minimum age at which a worker can claim the credit.

4 – It proposes an expansion of the current Child Tax Credit making it fully refundable and available in monthly advances. Currently only $1,400 of the $2,000 credit is refundable.

5 – It includes an expansion and an enhancement to the Low-Income Housing Credit.

The proposal has many other items including a Billionaire Tax and even more tax on stock buy-backs. But what it doesn’t address is an extension on any of the provisions of the Tax Cuts and Jobs Act which are due to expire in 2025.

Let me leave you with this.

The question becomes whether or not any of this will pass. Let’s remember that most of this was already proposed in the first Build Back Better Bill.

Back when there was a Democratic majority in both the Houses, the original bill died in the Senate. Since the Democrats have now lost the House, it would seem unlikely that all of this will go anywhere.

But let’s remember our history. B to the third may have died in the Senate, but portions of it were included in the Inflation Reduction Act which passed primarily as an Infrastructure Bill.

It isn’t a long walk to see that plenty of horse-trading will soon begin. I’m sure the GOP will have its own budget proposal out in the next couple of weeks.

We can only hope that somewhere in the middle, our lawmakers will remember that their main job is to govern.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
President
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