The graduated rates would phase out for corporations making more than $10m.
21% on income above $400,000 and up to $5 million.The HW&M Bill would replace the flat corporate income tax with the following graduated rate structure: The following provisions would likely have the broadest effects. Proposed tax provisions in the House Ways & Means Committee reconciliation bill would significantly affect privately owned businesses. Proposed income tax rules affecting privately owned businesses - domestic provisions Change how and when grantor trusts are taxed for gift and estate tax purposes and treat sales to grantor trusts as income-taxable events.Allow the TCJA-doubled estate tax exemption to expire after 2021, rather than after 2025.Increase the three-year carried interest holding period enacted under the Tax Cuts and Jobs Act of 2017 (TCJA) to five years.Impose a 3% surtax on an individual's modified adjusted gross income (AGI) in excess of $5m.Expand the net investment income tax (NIIT) to apply to net income derived in the ordinary course of a trade or business for taxpayers with taxable income greater than $400k (single filer) or $500k (joint filer).Return the top individual income tax rate from 37% to 39.6%.Increase the long-term net capital gains rate from 20% to 25%.Proposed changes of interest for individual taxpayers would: Proposed income tax rules affecting US tax resident individuals and families - domestic provisions Tax Alert 2021-1697 (summarizes provisions affecting financial transactions and digital assets).Tax Alert 2021-1696 (summarizes provisions affecting individuals).Tax Alert 2021-1681 (summarizes provisions affecting partnerships).Tax: Tax Alert 2021-1677 (summarizes provisions on credits and incentives).Tax Alert 2021-9023 (provides in-depth discussion of international provisions).Tax Alert 2021-9022 (summarizes provisions affecting state and local taxation).Tax Alert 2021-9019 (provides high-level discussion of international provisions).Tax Alert 2021-9021(provides overview of tax proposals in HW&M Bill).To date, a Senate version of a reconciliation tax bill has not been released.įor other discussions of the tax proposals in the HW&M Bill, please see the following EY Tax Alerts: Significant changes may be made to the provisions described in this Alert as part of the legislative process. Taxpayers should consider the HW&M Bill a key part of a process but not necessarily a final product that will be enacted into law. Recently proposed tax provisions in the Build Back Better Act, which were approved by the House Ways & Means Committee (the HW&M Bill), would increase the overall US tax burden on privately held international businesses and investments, whether those are in corporate or pass-through form, as well as the individuals and families owning them. Tax proposals of bill approved by the House Ways and Means Committee would impact many higher-income families, individuals and privately held corporate groups