April 5, 2021

What New Do We Know About The President’s Tax Plans?

Left out of President Joe Biden’s infrastructure program announced last week was an outline for how the administration plans to raise individual and small business taxes to pay for its new infrastructure spending. Those details are coming later this spring, the White House said.

Despite the lack of a formal plan, new details did emerge on what could be in the proposal—and what is likely to be left out. It has been reported that there is no plan to pay for climate change-related investment by enacting a carbon tax and, as Bloomberg said, the president is unlikely to include a measure to reinstate deductions for state and local taxes paid.

That latter move could cause the president to lose key support from Democrats. Specifically, Reps. Josh Gottheimer (D-N.J.) and Tom Suozzi (D-N.Y.) have said they will not vote for the legislation without the SALT measure.

What is the Biden administration expected to announce in the coming weeks? A plan to raise the maximum tax rate on upper income earners, raise the capital gains tax rate on those earners, increased taxes on dividends, and scale back the 199A deduction used by pass through businesses. Stay tuned to Connecting the Dots for updates on these proposals.