46th President of the United States, Joe Biden has announced a three-part program that uses tax policy changes within the United States to fund crucial programs that are designed to modernize the American economy.
One part that has been officially enacted was the American Rescue Plan. You can read more about the American Economic Recovery here
The following legislation is purposed but has not yet been pushed through the entire legislative process.
The American Jobs Plan, which was announced on March 31st, 2021, would increase income taxes on corporate profits. The increased tax revenue would be allocated to future infrastructure improvements around the country.
The American Families Plan proposes increases on income taxes for wealthy individuals. This would include a higher capital gains rate to help pay for the $1.8 trillion plan price tag. The AFP would provide subsidized and free education, before and after the traditional K-12 current education structure, support paid medical leave, and expanded coverage under Obama’s Affordable Care Act.
Examining the details of the AJP and AFP is crucial to understanding how the purposed changes to the tax structure could affect many Americans and their businesses. The federal income tax bracket would return to the pre-trump amount of 39.6 percent. Corporate income tax rate would increase to 28 percent, a 7 percent increase. American corporations would be subject to a foreign tax of 21 percent. Capital gains would increase if you’re income is over $1 million. Additionally, proposals have been made to extend and increase the child tax credit. Lastly loophole closures and tax deferral limitations have been purposed.
While there is a lot of changes being pushed through congress, it is unlikely that all of it is actually able to become law. It is a major goal of Biden’s administration to help the American economy not only recover from the Pandemic but thrive to levels surpassing pre-Pandemic.
It is expected that the AJP and AFP will come to fruition within the next three months, most likely with some serious changes to the policy to make it more bi-partisan.
Read more about the AJP and AFP , the White House has issued detailed information regarding the pending legislation, see below.
https://www.whitehouse.gov/american-jobs-plan/
https://www.whitehouse.gov/american-families-plan/
