House Ways and Means Committee Chairman Richard Neal (D-MA) on September 13 released his ‘chairman’s mark’ of tax increase and tax relief proposals that are expected to be considered on September 15 as part of “Build Back Better” reconciliation legislation that the committee currently is developing. Chairman Neal’s tax increase proposals are projected to raise federal revenues by more than $2 trillion over 10 years, according to estimates by Joint Committee on Taxation (JCT) staff.
Key tax increase proposals offered by Chairman Neal include:
- Increasing the top US corporate tax rate from 21% to 26.5% for businesses with income in excess of $5 million, effective for tax years beginning after 12/31/2021;
- International tax changes, with various effective dates, that include provisions related to global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), the base erosion and anti-abuse tax (BEAT), subpart F in general, and limits on interest deductions;
- Increasing the top individual income tax rate from 37% to 39.6%, effective for tax years beginning after 12/31/2021; and
- Increasing the current top rate on capital gains and qualified dividend income from 20% to 25%, effective for tax years ending after the date of introduction (September 13, 2021), with a transition rule that retains the 20% tax rate for capital gains and qualified dividend income recognized on or before that date.