The Senate’s nonpartisan parliamentarian Monday ruled in favor of a Democratic effort to pass additional legislation through a process called reconciliation…. The ruling will give Democrats more room to maneuver to pass President Biden’s agenda, including his recently announced $2.3 trillion infrastructure plan.
And that means something else is on: Serious tax planning.
President Biden last week outlined a $2 trillion infrastructure plan to be funded in part by raising the corporate rate to 28% from 21% and hiking the minimum tax on U.S. companies’ foreign profits. The plan would also make it tougher for foreign-owned businesses with U.S. operations to benefit from moving their profits to low-tax countries…..
FM Global, a Johnston, R.I.-based mutual insurance company, is considering deferring a tax incentive known as bonus depreciation…. By deferring bonus depreciation and other incentives, FM Global can take deductions in future years when tax rates could be higher…. Companies won’t know until later which of the proposals actually comes to fruition. In many cases, they have already modeled Mr. Biden’s plan and are making investments based on forecasts they have adjusted for potential related risks, said John Gimigliano, head of tax legislative services at professional-services firm KPMG.
And if they get too cute, Janet Yellen has some plans of her own.
Citing a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses, Yellen said the Biden administration would work with other advanced economies in the Group of 20 to set a minimum…. “It is important to work with other countries to end the pressures of tax competition and corporate tax base erosion,” Yellen said.
And, hey, since we’re raising taxes, and since Andrew Cuomo is too weak to stop it anymore....
[New York] Legislators were briefed on a plan under which income-tax rates would rise to 9.65% from 8.82% for single filers reporting more than $1 million of income and joint filers reporting more than $2 million, the people said.
The plan would also add two new tax brackets. Income over $5 million would be taxed at 10.3% and income over $25 million would be taxed at 10.9%, the people said of the plan, and the new rates would expire in 2027…. The budget would also increase New York’s corporate franchise tax to 7.25% from 6.5% through 2023, the people said.
But look: It’s not all bad. There’s no stock-transfer tax, and neither of these, either.
Previous legislative proposals to increase the estate tax and enact a 1% surcharge on capital gains aren’t part of the emerging budget deal, the people said.
Senate Parliamentarian Rules in Favor of Democratic Reconciliation Effort [WSJ]
Companies Speed Up Tax Analysis in Response to Biden Infrastructure Plan [WSJ]
Yellen calls for minimum global corporate income tax [AP]
New York Lawmakers Near Budget Deal to Raise Income, Corporate Taxes by $4.3 Billion [WSJ]