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American Family Plan—Summary of Certain Key Tax Components

On Wednesday April 28, 2021, President Joseph R. Biden announced the American Families Plan, designed to expand access to education, child care, and health care, among other initiatives. The White House released a fact sheet outlining the plan, and Biden detailed the plan in an address to Congress. The American Families Plan would be funded by increasing tax enforcement on corporations and high-income taxpayers, enforcement of which would be supported by newly enhanced information reporting from financial institutions. The initiatives would also be funded by raising taxes on high-income taxpayers, including (i) increasing the top income tax rate to 39.6% from 37%, (ii) increasing the capital gains rate to 39.6% from 20% for those earning $1 million or more, (iii) eliminating a step-up in basis for gains in excess of $1 million, (iv) eliminating the carried interest loophole, (v) eliminating the special real estate tax break on gains greater than $500,000, (vi) extending the limitation that restricts excess business losses, (vii) and ensuring those making over $400,000 pay the same consistent 3.8% Medicare tax. These proposals are summarized in this Alert.

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Consolidated Appropriations Act (CAA) Phase 4 Stimulus Package—Highlight of Certain Key Tax-Related Provisions in the CAA

Practices: Tax

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On December 21, 2020, a bipartisan agreement was reached on the Consolidated Appropriations Act 2021 (CAA or Phase 4 Stimulus), in furtherance of the fourth phase of the federal government’s response to the COVID-19 crisis. (The bill was passed on December 21, 2020 by both the House of Representatives and the Senate.) The key tax provisions of the CAA are summarized in this Alert, and include an expansion of the employee retention credit, an additional deferral of payroll taxes, additional economic impact payments for individuals, and a second round of the Paycheck Protection Program (PPP). 

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