U.S. Budget Reconciliation Package Update
U.S. House Procedural Vote Permits Reconciliation Package to Advance Forward in the Legislative Process
Following an earlier vote in the U.S. Senate, where Members advanced by a 69 to 30 vote the Infrastructure Investment and Jobs Act, (aka, the bipartisan infrastructure bill), last week, the House advanced the blueprint for the larger, budget reconciliation vehicle. This was done with an agreement that the House would vote on the smaller, bi-partisan infrastructure package no later than September 27th.
The Senate approved legislation includes about $550 billion in new federal spending - focused on improvements for roads, bridges, highways, rail, ports, waterways, broadband and other elements largely viewed as traditional infrastructure. The $3.5 trillion budget reconciliation package will be developed into legislation utilizing several elements of the Biden Administration’s American Families Plan. Also referred to as the “human infrastructure” package, the legislative initiatives outlined in the American Families Plan will require financial revenue and connected offsets.
Primary potential spending offsets under discussion include:
An increase in corporate tax rate
- C-rate from 21 to 25 - 28%
Global intangible low-taxed income (GILTI) modification for multinational corporations
- Current focus is on increasing tax revenue from lower income tax countries
S. Corps/pass-thrus & related businesses
- Potential increase in in tax liability for S. Corps and similar businesses with income levels over $400k annually
- Adjustments to taxes connected to estate transfers and capital gains tax rates
Again, the details and connected tax adjustments will not be known until legislative text is released. IAM will provide additional details once they become available.