The US Treasury recently released its Green Book—the colloquial name for the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals. The Green Book outlines specific tax provisions the Treasury would like to enact. Its proposals will purportedly raise $2.4 trillion in new revenue through a broad range of changes to the tax code.
In March 2021, the Biden administration announced many corporate tax proposals in broad terms as part of the Made in America Tax Plan. The Green Book builds on those proposals and includes more detailed explanations. In addition, the Green Book contains more detail about two other plans: the American Jobs Plan and the American Families Plan.
Challenging Provisions
Several provisions stand out as particularly challenging for taxpayers, including:
- Strict limitations on like-kind exchanges and carried interest
- Individual and corporate income tax rate increases
- Repeal of the S corporation active income exception from Medicare or Net Investment Income Tax
- Increase in estate and gift tax
- International provisions
- An increase in the capital gains tax rate and new rules about when gains would be triggered
Incentives for Taxpayers
The proposals also include several incentives for taxpayers in specific industries, including expanding tax credits and incentives for:
- Manufacturing
- Renewable energy
- Alternative fuels
- Carbon capture
- Onshoring of jobs and investment
What’s Next
Congress has a lot of work ahead before these proposed changes become law. The committees that draft legislation typically revise or remove provisions included in the proposals.
Those changes could include the application dates for different provisions, so much is still unknown about the proposed changes.
We’re Here to Help
The proposed changes will have varying impacts on businesses and individuals based on their specific circumstances.
Please reach out to your Moss Adams professional to see how we can help you and your business make important decisions and plan for the changing environment.