White House, Congress Willing To Go Back To Build Back Better Drawing Board
Last week, President Joe Biden said he is willing to work with Congress to split up the components of his Build Back Better “human infrastructure” bill. Sen. Joe Manchin (D-W.Va.) who said last month that he was unwilling to vote for a more comprehensive piece of legislation, said he is willing to come to the table as well, but that negotiators must “start from scratch.”
As a reminder, MSCI opposes the tax increases that have been proposed to pay for the Build Back Better plan. According to an EY analysis commissioned by the S-Corp Association, 81 percent of the three individual income tax hikes in the plan would be paid by pass-through businesses. The analysis also found that, of the total $1.45 trillion tax increases in Build Back Better, $1.3 trillion fall on business income. Read more here.
For pass-through entities, the outline calls for several new surtaxes, including:
- A 3.8 percent net investment income tax applied to business income greater than $400,000 (single) or $500,000 (married);
- A five percent surtax on individuals with adjusted gross incomes (AGIs) totaling more than $10 million; and
- An additional three percent surtax on AGIs totaling more than $25 million.
For corporations, the outline calls for:
- Creating a “book tax,” or new 15 percent corporate alternative minimum tax in the form of a tax on financial statement income;
- Placing new limitations on companies’ ability to deduct interest on business loans;
- Imposing a new excise tax on stock buybacks; and
- Implementing a higher global minimum tax that would be more complex and that would subject more foreign income to the tax.
Read the National Association of Manufacturers’ full summary of the legislation here.
MSCI asks that its member company leaders and employers use this link from the National Association of Manufacturers or this link from the U.S. Chamber of Commerce to send a letter to their lawmakers asking that they oppose these costly tax increases.