The administration released its fiscal year 2023 budget on March 28, 2022. This budget includes details of the administration’s priorities for tax policy in the coming year and beyond. The detailed plan, officially titled the “General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals,” is often referred to as the “Green Book.” The plan contains various tax policies the administration would like to see adopted. Simply put, the plan is a wish list of policies.
Unfortunately, a wish list won’t realize the policies. Tax legislation must be formally introduced and work its way through Congress before it is sent to the president. So, the purpose of the Green Book is to provide information on what tax changes the administration wants implemented, as there will be members in Congress who either support these measures or oppose them. Some of the tax provisions included in the Green Book were pushed last year by the administration and congressional leaders but were eventually removed from the “Build Back Better” (BBB) bill. Even though the administration unsuccessfully tried to pass some of these changes last year, they are included in this year’s Green Book to show that the administration still views them as priority changes.
Similar to what the administration proposed last year, the Green Book seeks higher taxes on individuals and corporations. The latest proposal reintroduces some tax policies that failed to gain traction last year and adds new ideas that are designed to raise taxes on corporations and wealthy individuals. The administration would use the additional revenue as part of its new bold spending plans. Another key feature in last year’s BBB plan was that any tax increases would not fall on those making less than $400,000 a year. The plan released this week maintains this goal of exempting those individuals from any tax hikes – but for those above $400,000, the administration offers several new tax proposals.
Here are several tax proposals of importance that the administration released in its Green Book:
This new tax is referred to as the “billionaire minimum income tax.” While it will apply to all billionaires, it will also kick in for those with worth of $100 million or more. This latest tax proposes that those with over $100 million in assets must pay at least 20% tax on their overall income, which includes unrealized gains. This tax is a complicated provision with many moving parts and payment options, so it is still likely to face an uphill battle in Congress if it is formally introduced.
These are only a few of the many tax policies identified in the Green Book. Click here to review the full Green Book from the administration.
To reiterate, the items above are on the administration’s wish list of tax policies it would like to see adopted. The administration still needs to reach out and find members of Congress willing to support these provisions. In addition, there are talks of rekindling the BBB that stalled in the Senate last year, following Senator Joe Manchin’s decision to oppose the bill. Manchin has now expressed some indication that he is willing to revisit the bill. As of now, it is unknown what parts of the BBB would be adopted, or perhaps what items in the Green Book could be added to the bill. We will keep a close eye on this, so stay tuned.
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