The Biden administration is now proposing to add dozens of new burdensome provisions to the tax code with the recent release of the FY 2024 “Green Book”.
While they are saying that many of these provisions are aimed at high-income taxpayers and businesses, workers will ultimately pay the price. Reduced investment and innovation will lead to fewer jobs and lower wages.
Some of the provisions include:
Individual Taxes
- Raising the top individual income tax rate to 39.6 percent.
- Expanding the base of the Net Investment Income Tax to include all pass-through income while raising the NIIT tax rate from 3.8 percent to 5 percent.
- Taxing capital gains and qualified dividends at ordinary income tax rates up to 39.6 percent for taxpayers with income over $1,000,000, which combined with the Net Investment Income Tax yields a top rate of 44.6 percent on investment income. This would be the highest rate in several decades.
- Imposing a tax on the unrealized gains on the transfer of appreciated property by gift, transfers at death, transfers to and from trusts, and several others.
- Repeal of the deferral of gain from Like-Kind exchanges in excess of $500,000 for each taxpayer, or $1,000,000 in the case of married taxpayers.
- Taxing unrealized capital gains with a 25 percent minimum tax for the wealthiest taxpayers.
Business Taxes
- Raising the corporate income tax rate to 28 percent, resulting in a higher corporate tax rate than any of our major trading partners.
- Increasing the GILTI tax, further exposing U.S. companies to double taxation on their foreign income.
- Quadrupling the stock buyback tax to 4 percent, which can also subject multi-national companies to double taxation.
- Raising taxes further on targeted industries, such as pharmaceutical innovation and oil and gas production, the cost of which would likely be passed on to consumers.
These are just a few of the provisions in the 226 page “Green Book”. With a split congress it is unlikely that a lot of these provisions would be able to pass, but we’ll keep an eye on the progress of any bills that include any of these provisions.
Contact us to see how the Biden tax proposals would affect your individual or business taxes.
Dasta & Company CPAs and Consultants