Since the March 11 enactment of the American Rescue Plan (ARP) – which extended and expanded numerous tax credits – Congressional Democrats and the Biden Administration have proposed sweeping changes to the tax code as a method to pay for Democratic policy priorities. Many of these proposals are long-held objectives and/or part of then-candidate Joe Biden’s campaign platform; nevertheless, with narrow majorities in both chambers and the budget reconciliation process providing a vehicle, we can expect a determined effort to enact changes to corporate and individual taxes.
The ARP was part of the Biden Administration’s response to the pandemic and a two-part infrastructure policy – the American Jobs Plan and the American Families Plan – has now been proposed to bolster the economic recovery. On March 31, President Biden announced the American Jobs Plan (AJP), which includes more than $2 trillion in infrastructure spending. Concurrently, the Treasury Department released a paper entitled the Made in America Tax Plan, which includes not only changes to domestic corporate tax policy, but also international tax policy to pay for much of the AJP. Subsequent to the release of those two plans, the White House released the American Families Plan (AFP) on April 28, which provides an additional $2 trillion of investments in human capital. To pay for the AFP, the Administration proposed changes to individual tax rates and various capital gains policies.