The US Treasury released on Friday 28 May 2021, a 114-page “Green Book” general explanation of tax proposals included in President Joe Biden’s fiscal year (FY) 2022 budget submission to Congress, also released the same day. The Green Book provides new details on proposals to increase corporate and individual taxes to help offset the $4.1 trillion combined cost of President Biden’s previously proposed American Jobs Plan and American Families Plan.
Corporate tax proposals include increasing the US corporate income tax rate from 21% to 28%, establishing a new 15% minimum tax on companies with worldwide book income exceeding $2 billion, increasing the global intangible low-taxed income (GILTI) tax rate to 21%, and repealing the deduction for foreign derived intangible income (FDII). 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, and limiting the use of “step-up in basis” rules.
Corporations and individuals should review the Treasury Green Book explanation of the President’s tax increase proposals as part of their efforts to evaluate and model the potential effect of these proposals on their employees, job creation, and investments in the United States.