The White House Delivers Two Plans
On March 31, 2021 President Joseph Biden announced two plans: The American Jobs Plan (AJP)—a massive ~$2.7 trillion proposal designed to improve infrastructure over the next eight years—and the Made in America Plan, a plan to raise $2.1 trillion over the next 15. For a summary of both plans, check out the full article here.
NASA Delivers the Mars Ingenuity Helicopter
NASA’s Ingenuity has completed two of its five test flights. After surviving landing and frigid nights, Ingenuity has navigated in an atmosphere with half the gravity of Earth and just 1% of its density. To interact with a model of Ingenuity, click here.
What does the JPA do?
The short answer is: a lot. The longer, but far from comprehensive answer is: the JPA is an attempt to improve infrastructure (roads, bridges, rail, public transit, airports, ports etc.) with an eye on racial inequity and climate change. Components also address:
- Stimulating the manufacture and use of electric vehicles
- Replacing 100% of the nation’s lead water pipes and service lines
- Expanding high-speed broadband coverage to 100% of the US
- Incentivizing investments in the electric power grid
- Plugging orphan oil and gas wells and mine clean up
- Remediation and redevelopment of Brownfield and Superfund sites
- Creation of a Civilian Climate Corps
- Building and retrofitting 2 million-plus buildings and homes to increase affordable housing and improve energy efficiency
- Improvements to public housing, VA hospitals and federal buildings
- Modernizing public schools and investing in community colleges
- Improving access to childcare facilities
- Supporting union organizing
- Raising wages and benefits for home care workers and expanding access to long-term care services under Medicaid
- Investing in R&D, technology and bio preparedness
Who Pays for the JPA?
The short answer to this question is corporations. President Biden’s Made In America Tax Plan includes an increase in the corporate tax rate from 21% to 28%, a 15% minimum tax on large corporations’ book revenue, and extending limits on the ability of US firms to avoid US taxes on foreign-source income. The Plan also eliminates deductions for certain corporate activities and eliminates special preferences for fossil fuels. You can check out more plan details on this website.
Will the Plans Pass?
We’ve been around the legislative block too many times to make any bets. We’ll be watching whether Speaker Pelosi will be able garner the votes needed; whether Senate Republicans will support an increase in the corporate tax rate and whether representatives from high-tax states will support the Made in America Plan if it does not include a repeal of the cap on state and local tax deductions. Note: Before the deduction was capped at $10,000 in 2018, 47 percent of Maryland filers in 2017 who itemized deductions claimed the deduction for state and local taxes. https://www.taxpolicycenter.org/briefing-book/how-does-deduction-state-and-local-taxes-work
Coming Soon: More From The White House
President Biden will announce his American Families Plan in a speech to Congress on April 28. Analysts expect this Plan to increase spending by about $1.8 trillion, provide $500 billion in new tax credits and focus on “people infrastructure” such as paid family and medical leave, child-care funding, universal pre-K and tuition-free community college. Paying for this Plan will be wealthy individuals through higher income and capital gains taxes. Bloomberg News reports that the marginal rate would increase to 39.6% for individuals making over $1 million.
Will you pay more taxes in 2021?
During his campaign, then-candidate Biden pledged not to raise taxes on anyone making less than $400,000 per year. Watch the News page on our website because there’s more to come as negotiations progress.
Fully Deductible Business Meals Are Back!
In December of 2020, Congress passed The Consolidated Appropriations Act to provide economic relief and fund a stimulus package designed to ease the effects of the Coronavirus on Americans. That Act restores 100 percent deductibility to business meals provided in restaurants (including those purchased while traveling) from January 1, 2021 until January 1, 2023. Some meals remain only 50 percent deductible, so if you don’t know if a meal qualifies for full deduction, give us a call.