The House Rules Committee released a revised text of the “Build Back Better” bill H.R. 5376 on Thursday, October 28th. The revised bill eliminates some things, keeps some things the same, adds some new provisions and some initial ideas never made it:
The revised bill eliminates the paid family and medical leave provisions that were in an earlier version of the bill. The revised bill also drops various retirement provisions, such as a credit for small employer automatic retirement arrangements, as well as provisions related to certain tax-exempt bonds. In addition, this version of the bill does not contain a number of tax-related items that were in the previous version:
- Corporate income tax rate increases
- Individual ordinary income tax rate increases (but see surcharge under what’s new)
- Individual capital gains and qualified dividends income tax rate increases (but see surcharge under what’s new)
- Carried interest modifications
- Limit on deduction of qualified business income for certain wealthy individuals
- Changes to grantor trusts rules
- Valuation rules for certain transfers of nonbusiness assets
- Increase in limits on estate tax valuation reduction of certain real property
- Termination of temporary increase in unified credit
It leaves in an extensive series of credits for renewable energy and carbon reduction, as well as the extension and modification of the child tax credit and the earned income tax credit.
Instead of an increase in the corporate tax rate, there is a fifteen percent corporate alternative minimum tax. There is also a one percent surcharge on corporate stock buyback; a three to five percent surcharge on high-net-worth individuals; and a limit on excess business losses.
What Never Made It.
There were several items under consideration for possible addition to the bill but are not included such as – market to market regime for very high income individuals, trust and estates; financial institutions reporting on bank account activity; and state and local tax (SALT) deduction relief.
It is possible that further modifications to the bill will be made by the House Rules Committee or during consideration by the House of Representatives. Also, the Senate will need to consider the legislation and could potentially amend. The timing of the possible House and Senate vote is unclear. The Items under “What’s gone or What never made it” could potentially be added later in the process.
HM&M is watching the developments closely, and we will work to keep you informed. If you have any questions, please contact your HM&M advisor.
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@2021 KPMG.com. “Legislative update: House Rules Committee releases updated version of the “Build Back Better Act” (initial impressions)”
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