In a public address on Wednesday night, April 28, 2021, President Biden spoke to a joint session of Congress and proposed the American Families Plan. Due to this being the introduction of the plan, not all details have been made available - but the following are key elements from President Biden's address.
The following bullet points are based on commentary articles from Forbes, MSNBC, Investopedia, Fox business, Accounting Today along with a Fact Sheet provided by the White House and an outline provided by EY - American Families Plan:
- Child tax credit - Extension through 2025 of the increase in the child tax credit from his March pandemic relief package [Increase of credit from $2K to $3k for ages 6-16 & $3,600 for ages under 6]
- Childcare tax credit - Permanent Childcare tax credit of $4,000 for the care of one child under the age of 12 and $8,000 for multiple children
- Premium tax credits – Make permanent the enhanced ACA premium tax credits included with the American Rescue Plan
- Earned income tax credit – Make permanent the expansion of the earned income tax credit for childless workers and increase in possible benefit
- Corporate income tax rate – Increase of the corporate income tax rate from 21% to 28%
- Personal income tax rate - Increase of the top personal income tax rate to 39.6%
- Capital gain tax rate - Increase capital gains tax rate to a maximum 39.6% for households earning $1 million or more
- The increase of the capital gains tax rate, coupled with the 3.8% Medicare surcharge, could have a tax rate of 43.4% (this is more than the top personal income tax rate)
- Basis step-up – Possible elimination of the step-up in basis for inherited property
- IRS Enforcement – A request was also made from the President for congress to “beef up funding for the IRS” giving them more power to audit wealthy Americans.
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