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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