TAX ACCEPTANCE: The rubber hit the street: Senate Democrats announce $ 3.5 trillion bundle – taxes

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CONTROL: The rubber hit the road: Senate Democrats announce $ 3.5 trillion package

July 22, 2021

Miller & Chevalier Chartered

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Senate Democrats last week, led by the Senate majority leader
Charles Schumer (D-NY) announced a deal on a $ 3.5 trillion package that includes:
President Biden's spending priorities, including "social"
Infrastructure "Proposals with a focus on education, health care,
Childcare, Paid Family and Sick Leave, and Climate Change. These
Package is expected to be included in the budget
Rules of reconciliation and regardless of the bipartisan agreement announced last month
relying on traditional infrastructure such as roads and
Bridges. The Senate plans the bipartisan
Agreement this week.

Details have not yet been outlined, but it has been reported
that the $ 3.5 trillion package will be offset by health care
Savings and reform of the tax code. Based on President Bidens
recent proposals and general support from the Democrats in Congress,
Tax collectors to consider include taxes
of the wealthy and the increase in the corporate tax rate. Additionally,
Democrats on the tax committees focused on
international tax proposals on global low intangible taxes
Income tax (GILTI), land reduction and abuse tax (BEAT),
immaterial income from abroad (FDII) and the 15 percent
Minimum tax on global book income. All of these suggestions are
probably on the menu of options to pay for the package.

How much tax revenue will be required for this is still unclear
must be topped up to offset the $ 3.5 trillion package, an important one
political calculation, the President Biden and the Democrats
The management of the congress must take this into account in the preparation
Tax proposals is the support of moderate congressional parties,
especially Senator Joe Manchin (D-WV) and Senator Kyrsten Sinema
(D-AZ). Since the package is expected to be under the
Budget voting rules, consisting of just a simple majority
Only democratic votes are required for adoption. Given the
tight margins in the House of Representatives and especially in the (50-50) Senate,
moderate democrats will play a very important role in this
the tax proposals are drawn up. Senator Manchin already has
declared opposition to President Biden
Proposal to raise the corporate tax rate to 28 percent and instead
expressed support for a rate of 25 percent.

Such positions of moderate Democrats that are generally less
Supporting tax increases is important to monitor as that
$ 3.5 trillion package will be advanced in the coming months. senator
Manchin does not yet have a fixed position on the package, but it does
expressed his openness to reviewing the offsets. The support of
moderate Democrats will determine whether or not
President Biden can win and get this legislative victory
across the finish line. Stay
Voted. #TaxTake

Upcoming lectures and events

On July 21st, Loren will speak at the 11th annual NABE transfer pricing
Symposium on the panel "Thoughts of Practitioners"
to the COVID transfer pricing guidelines of the OECD. "

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