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Treasury Green Book explains Administration tax proposals affecting high-income individuals

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June 2021

In brief

The Treasury Department on May 28 published the ‘General Explanations of the Administration’s Revenue Proposals’ (traditionally known as the ‘Green Book’) providing additional details of tax proposals included in President Biden’s FY 2022 budget submission to Congress, many of which may affect high-income individual taxpayers. As originally outlined in his “American Families Plan” on April 28, President Biden’s individual tax proposals include increasing the top individual ordinary income tax rate from 37% to 39.6%, taxing capital gain and qualified dividend income at ordinary rates for individuals with income above $1 million, limiting the use of “step-up in basis” rules, and closing the “carried interest loophole.” 

Observation: While the Green Book provides more context and details with respect to President Biden’s tax proposals, it does not set forth draft statutory language. The details of any statutory language will be the subject of action by Members of Congress and tax committees staff. President Biden’s tax increase proposals will need the support of all 50 Democratic Senators and nearly all House Democrats to be enacted over the expected objections of Congressional Republicans. Moderate Democrats in the House and Senate may seek to scale back some of President Biden’s proposals and may seek to block others.

Action item: For some individuals, enactment of any or all of the provisions could have a significant impact on their income tax and wealth plans. Examining the impact of each proposal on your unique circumstances may provide opportunities to make adjustments to better align your wealth and philanthropic plans to these changes if they are enacted. 

Individual taxpayers should be aware that there are some proposals, such as proposals for comprehensive financial account reporting and increased reporting requirements of crypto transactions, that may have an indirect impact on them. A separate PwC Insight will address the Green Book business proposals.

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Rohit Kumar

Principal & Co-Leader Washington National Tax Services, PwC US

Frank Graziano

Personal Financial Services Leader, PwC US

Brian Rebhun

Asset Management Tax Leader, PwC US

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