On March 28th, 2022, President Biden released his 2023 budget, which included several significant tax changes. The President’s budget is just a proposal, and before becoming a law must be drafted into a bill and approved by both the House and the Senate. The President’s proposals, often modified by Congress, have the potential to fail, as exemplified in the Build Back Better plan.
Among the proposed changes are:
- Raise the corporate income tax rate from 21% to 28%
- Raise the individual income tax rate from 37% to 39.6%
- Long-term capital gains and qualified dividends of taxpayers with taxable income of more than $1 million would be taxed at ordinary rates
- Require American households worth more than $100 million to pay a rate of at least 20% on their income as well as unrealized gains
- Eliminate like-kind exchanges (Section 1031)
- Tax carried interests profit as ordinary income
The changes in the President’s budget are his vision of what he thinks should be done. The House and Senate will have their own priorities and it remains to be seen what if anything makes it into law. Our team of experts is closely watching the developments of this proposed budget and will report on any updates that may impact tax changes. Please contact your WG advisor if you have concerns about how the passing of any budget changes may affect you.