As Congress races to push through Biden’s Build Back Better Act (“BBBA”), President Joe Biden has revealed modifications to his spending framework. Noticeably absent from President Biden’s BBBA are taxes concerning estate planning. The new adjustments to the BBBA display a sharp change in direction away from estate tax planning. Instead, the revised BBBA aims to tax corporations and high-income Americans. The BBBA asserts that corporations reporting profits over $1 billion per year will now be assessed a 15% corporate minimum tax and a 1% surcharge on corporate stock buybacks. Furthermore, in an effort to prevent corporations from shipping jobs and profits overseas, the BBBA plans to implement a 15% global minimum tax on foreign profits of U.S. Corporations.
In an attempt to reduce the cost of prescription drugs and decrease the national deficit, the Biden administration intends to transform the tax infrastructure of high-income Americans. Specifically, the proposed BBBA increases the taxes of Americans who make more than $400,000 annually and assesses a new surtax on multi-millionaires and billionaires. The BBBA also plans to close the Medicare self-employment tax loophole by strengthening the net investment income tax for those making over $400,000 per year. The result of the BBBA is offsets estimated up to a total of $1,995 billion.
Consistent with the impact on large corporations and high-income Americans, the BBBA plans to strengthen the middle class by investing in affordable housing, higher education, and high-quality care for children, the elderly, and people with disabilities. The BBBA also presents the most cutting-edge climate change bill in American history.
Although the BBBA is being zealously promoted by the Biden administration, the transformative spending framework faces certain challenges ahead, as the Democrats only hold a razor thin majority in Congress. Please be patient and do not hesitate to contact us with any questions or concerns about your specific situation.
