Unless lawmakers act, 2022 will be the first of several years that the U.S. tax system automatically changes for the worse.
All Related Articles
Congressional lawmakers are putting together a reconciliation bill to enact much of President Biden’s Build Back Better agenda. Many lawmakers including Senate Finance Committee Chair Ron Wyden (D-OR), however, want to make their own mark on the legislation.
Temporary policy creates uncertainty for taxpayers and scheduling more expirations will add to the already-expiring provisions under the Tax Cuts and Jobs Act (TCJA) of 2017.
Sen. Wyden recently introduced the Small Business Tax Fairness Act—the impact of which we modeled—to reform the Section 199A pass-through business deduction created in the Tax Cuts and Jobs Act (TCJA) of 2017. The provision currently allows taxpayers to deduct up to 20 percent of their qualified business income from their taxable income, subject to certain limitations.
While proponents of the Section 199A pass-through deduction claimed it would boost investment and critics claimed it would encourage tax avoidance and income shifting, new research casts doubt on both claims.
Biden’s tax vision is twofold: higher taxes on high-income earners and businesses paired with more generous provisions for specific activities and households.
The “Real Deal” would increase the tax burden on saving, investing, and working in the United States, and reduce the global competitiveness of the U.S. economy.