Biden Administration’s ‘Green Book’ Details Tax Proposals

The Biden administration yesterday released its “Green Book,” a document that contains proposed tax changes that the administration will likely pursue during the coming year. The administration views the Green Book proposals as supplements to the changes put forth as part of the Build Back Better legislative effort last year.

Among other things, the administration is seeking an increase in the corporate tax to 28%, an effective increase in the global intangible low-taxed income, or GILTI, rate to 20% with country-by-country application and the replacement of the base erosion and anti-abuse tax, or BEAT, with an undertaxed profits rule.

The proposed changes would also make the New Markets Tax Credit permanent, repeal the “like kind” exchange for various transactions, increase the top individual rate to 39.6%, make capital gains taxed at ordinary rates, eliminate carryover basis for estates and other transfers, institute a 20% minimum tax for very wealthy individuals and address carried interest taxed as ordinary income, among other things. Many of the provisions become effective depending on taxpayers’ income levels.

Significantly, certain previously floated proposals were left out of the Green Book, including a proposal requiring financial institutions to report information about customer accounts and proposed reductions to the Section 199A deduction. However, it remains possible that these and other provisions could be reintroduced through future legislation. The American Bankers Association continues to monitor ongoing tax-related developments and is in the process of reviewing the 114-page Green Book to determine its full implications for banks.