Navigating Possible Tax Policy Changes

Congressional debate continues to shape the form of potential tax policy changes designed to fund President Biden’s proposed “Build Back Better” spending package.

Currently, the Democratic Party is working toward a $1.75–$1.9 trillion bill, down from the original $3.5 trillion plan the White House proposed. To fund the proposed spending package, two notable bills have been put forth in the House:

• September: House Ways and Means Committee Bill
  Designed to fund a larger $3.5 trillion bill, this bill called for notable tax changes like increasing the individual, corporate and capital gains rate, limiting grantor trusts, and reducing the gift and estate exemption, among others.
• Late October/Early November: House Rules Committee Bill
  Revenue-raising measures in this reduced $1.75 trillion bill include a surcharge on individuals and trusts, expanding the Net Investment Income Tax, and IRA restrictions, among others.

In this updated report, we discuss the most significant potential changes for individuals, provide analysis surrounding their impacts and offer corresponding wealth planning strategies.

At the time of writing, the “Build Back Better” package and its specific proposals’ political pathway remains uncertain, complicated by several complex, and rapidly evolving, Congressional dynamics. Omission of previously proposed measures in the latest House Rules bill does not imply that they are off the table for future legislation.

We continue to advise that it is far better to plan than predict, as the political environment suggests that some degree of change is probable. As such, we will continue to communicate on the latest proposals and corresponding advice as developments merit.