U.S. House Plans To Vote On Tax, Infrastructure Bills This Week

Leaders in the U.S. House of Representatives confirmed late last week that they plan to have lower chamber lawmakers vote this week on both the bipartisan, Senate-passed $1.2 trillion infrastructure package and the White House’s Build Back Better budget reconciliation. That goal is ambitious and it is likely that lawmakers will not have enough time to consider both pieces of legislation.

As a reminder, MSCI supports the infrastructure bill, but opposes the budget reconciliation because Democrats had planned to include more than $2 trillion in tax increases in that plan.

Led by President Joe Biden, Democrats have fortunately scaled back those increases. Specifically, at a CNN townhall Thursday night President Biden promised the legislation would not “raise a single penny on taxes for the corporate side and or on wealthy people.”

While observers wait for a final proposal to see exactly how that statement will be interpreted by House and Senate leaders, it has been reported that Sen. Ron Wyden (D-Ore.) will issue a new proposal this week to tax unrealized capital gains on assets held by high-income individuals. This plan could replace the call for higher corporate taxes. Stay tuned to Connecting the Dots for more details next week, after Sen. Wyden’s outline is released.

There are plenty of other tax provisions to worry about as well, however. These include:

• A provision that would require financial institutions report consumers’ financial activity to the Internal Revenue Service (IRS). As Connecting the Dots has reported previously, MSCI strongly opposes this idea. While the final provision has not yet been written, it is likely that any transaction totaling more than $10,000 could trip this requirement, whether it is a payment to an independent contractor or taking out a loan to buy a new piece of equipment.
• S. Treasury Secretary Janet Yellen has advocated that federal lawmakers use the Build Back Better budget reconciliation to set a global minimum corporate tax rate. According to the National Association of Manufacturers (NAM), a program like the one that has been proposed by the Organization for Economic Cooperation and Development could reduce employment in the United States by one million jobs.
• As the S-Corp Association explained in a letter to member of Congress, the Build Back Better budget resolution could include changes to existing grantor trust rules that will unfairly punish family businesses, driving many of them into forced liquidations or sales, while stacking the deck in favor of the large, multinational corporations who have thrived throughout the pandemic.

As a reminder, individual member company leaders and employees who want to oppose these proposed tax increases can use NAM’s Action Page, available here, to do so.

Democrats also significantly cut the size of the Build Back Better budget reconciliation. Among other things, the party achieved this feat by reducing the scope of a paid family leave plan, limiting the extension of the expanded child tax credit, and eliminating a plan to provide tuition-free access to community college.

While lawmakers continue to hammer out the final outlines of the Build Back Better budget reconciliation, as noted above, the House could vote this week on the $1.2 trillion infrastructure plan. The Senate already has approved this legislation, but the House has delayed a vote several times. Member company employees and leaders should continue to write to their lawmakers using this portal from the U.S. Chamber of Commerce.

As a reminder, the bipartisan $1.2 trillion infrastructure bill would:

• Provide the largest investment in roads, bridges, and passenger rail in more than a half century and the largest federal investment in public transit, clean drinking water, and wastewater infrastructure in U.S. history;
• Connect 14 million Americans to broadband;
• Streamline the permitting process to prevent the federal government from blocking future infrastructure projects;
• Invest roughly $100 billion in energy, resiliency, sustainability, and climate change programs; and
• Provide incentives to increase private funding for infrastructure, including through public private partnerships.