Ways and Means Committee Releases Reconciliation Pay-fors

Monday the House Ways and Means Committee released draft text outlining the tax overhaul that will help pay for the $3.5 trillion reconciliation package. According to the Congressional Research Service, proposed tax increases on corporations and the wealthy would raise government revenue by $2.1 trillion over 10 years.

Corporate taxes are likely to be the most prominent tax issues debated in the reconciliation package. Draft texts would significantly roll back Trump’s 2017 corporate tax cut, bringing the top rate from 21 percent to 26.5 percent. President Biden pushed for 28 percent, and Senator Joe Manchin (D-WV) has previously gone on record saying he can only support up to 25 percent. The proposed text is currently undergoing markup in committee.

House Democrats are proposing to raise the top personal income tax rate from 37 percent to 39.6 percent. The higher rate would reverse a cut signed into law by Trump. The committee also proposed a 3 percent surtax on individuals with adjusted gross income of more than $5 million. The House bill would also increase the capital gains rate from 20 percent to 25 percent for “certain high income individuals,” short of the 39.6 percent proposed by Biden to equalize the taxation of investment and wage income. A 3.8 percent Obamacare tax on investment would then be added, meaning the wealthiest would pay a 28.8 percent federal rate on realized investment returns.

To become an IWLA member visit, http://31y.93c.myftpupload.com/become-an-iwla-member/