*Biden Administration tax proposal for 2022*

• Raise corporate tax rate from 21 percent to 28 percent

• Eliminate credits, deductions and other tax provisions that are targeted towards encouraging oil, gas and coal production

• Provide additional tax credits to extend and enhance renewable and alternate energy incentives

• Establish new business tax credit for new medium- and heavy-duty zero emission vehicles

• Increase top marginal tax rate on individuals to 39.6 percent (currently 37 percent); Lower the taxable income threshold for the 39.6 percent top rate to $509,300 for MFJ (currently $622,050)

• Increase capital gain tax rate to the ordinary income tax rates for taxpayers with adjusted gross income (AGI) over $1m (currently 20 percent is top capital gains tax rate; qualified dividends receive the same tax treatment)

• Treat transfers of appreciated property by gift or death as realization events; Would eliminate stepped-up basis provision on inherited assets; Taxable gain would be realized at time of transfer and would be the excess of the fair market value on the date of the gift over the donor’s basis in that asset; For a decedent, the amount of gain would be the excess of the asset’s fair market value on the decedent’s date of death over the decedent’s basis in that asset

• All trade or business income would be subject to the 3.8 percent net investment income tax for taxpayers with adjusted gross income over $400,000

• Make permanent the recent changes to the child and dependent care credit; Currently taxpayers can claim a refundable credit for up to 50 percent on the first $8,000 in eligible expenses for one child (up to $16,000 for two children); Credit phase out apply for AGI between $125,000-$438,000

• Extend recent changes to child tax credit through 2025; Currently taxpayers may claim credit up to $3,600 for each qualifying child under age six and up to $3,000 for all other qualifying children under age eighteen

• Increase the employer-provided childcare tax credit for businesses

• Partially repeal deferral of gain from like-kind exchanges; Would allow deferral of gain up to $500,000 for each taxpayer each year for real property exchanges that are like kind

• Increased budget adjustment to IRS of $6.7 billion over the budget window (2022-2031); Would support additional enforcement and compliance initiatives; Proposal would direct additional resources toward enforcement against those with the highest incomes, rather than Americans with actual income of less than $400,000

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