President Biden has proposed extensive infrastructure and other spending initiatives, including tax incentives for clean energy and domestic manufacturing, as well as corporate and individual tax increase proposals designed to offset the costs of his spending proposals.
On May 28, the Treasury Department released its ‘Green Book’ General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, providing additional detail on the President’s proposals. Congressional leaders also are considering proposals around renewable energy incentives.
On June 24, President Biden and a bipartisan group of Senators announced a $1.2 trillion infrastructure agreement that includes $579 billion in new spending on a range of infrastructure projects. The plan would be paid for by $584.3 billion in net offsets that include closing the tax gap, redirecting unspent emergency relief funds, and other offsets that include reinstating Superfund excise taxes on chemicals.
Companies should evaluate and model the potential effect of President Biden’s and other proposed infrastructure renewable credits and tax increase proposals, specifically the impact enacting such proposals could have on future rate base, interaction with existing regulator approval on the 2017 Act’s treatment of excess deferred taxes, and technology needs to account for the new layer of regulatory accounting.