Help Us Take Action - Contact Congress: Stop New Tax on Individuals and Trusts and Estates In Budget Reconciliation
Call to Action! There Is A New Additional Tax For Individuals And Trusts And Estates.
Despite the progress we’ve made in holding back harmful tax increases on families and their businesses, the Build Back Better Act still includes a significant threat due to two surtaxes imposed on high-income earners.
A 5% surtax on individuals who make over $10 million, but that surtax would apply at ONLY $200,000 of income FOR TRUSTS AND ESTATES! And the additional 3% surtax on those making more than $25 million would apply at ONLY $500,000 of income FOR TRUSTS AND ESTATES!!
Many families hold their business in a taxable trust and would be unjustly singled out with these extraordinarily low thresholds! This is wrong, unjust and makes no sense.
Contact your member of Congress!
Tell them that Trusts and Estates should pay the same rate of surtax that individuals do; if there has to be a surtax at all! Do not discriminate against them!
Important issues are:
Additionally, Speaker Pelosi (D-CA) has stated repeatedly that the House will not consider a bipartisan infrastructure bill until it also receives a second, larger reconciliation package advancing President Biden's social infrastructure plans. The House Progressive Caucus is also reportedly instructing its Members to withhold their votes on the bipartisan infrastructure bill if the reconciliation package does not include all of their priorities. Senate Budget Committee Chairman Bernie Sanders (I-VT) has drafted a $3.5 trillion budget resolution; however, Sen. Kyrsten Sinema (D-AZ) has stated she would not support a package that large in scope, indicating the topline number will likely come down as negotiations continue.
- Grantor Trusts: need to remain available for family businesses as a vehicle to pass the business on to the next generation of family business owners and operators, so that they can continue to support the employees and their families as well as their local communities.
- Valuation Discounts: continue to allow families and their businesses to use appropriate valuation discounts, which commonly result from the lack of marketability and liquidity of the assets, and the structure in which the business and assets are held, to help them pass the business on to the next generation.
- Estate Tax Lifetime Exemption: do not reduce the current lifetime exemption from its current level that allows families and their business to keep employees working in the business, continued livelihood for the family and the community supported.
- IRA Limitations: continue to allow family businesses to hold the private stock of the business in an IRA to support them in their retirement.
- 199A Deduction for Qualified Business Income: continue to allow family business to claim the limited deduction for qualifying business income, which is designed to achieve a more equivalent tax rate for pass-through businesses to the rate paid by public corporations.
- Income tax: recognize that family businesses owners generally pay taxes at ordinary income tax rates up to 37%, well above the 21% that public companies pay, so any increase in individual tax rates would be particularly harmful to the pass-through businesses they own.
The Senate is set to pass the Infrastructure Investment and Jobs Act (“IIJA”), a five-year, $1 trillion comprehensive infrastructure package that includes funding for transportation – roads, bridges, ports, airports, rail, and transit – as well as water infrastructure, broadband, power infrastructure, and climate resiliency. The bill, which the Biden Administration refers to as a “once-in-a-generation investment in our infrastructure,” contains $550 billion in new spending over baseline numbers, the majority of which is directed to the Department of Transportation, and includes many of the priorities that the Biden Administration first laid out in the American Jobs Plan. Once passed by the Senate, the IIJA will move to the House, where Speaker Nancy Pelosi (D-CA) has stated she will not take up the bill without a corresponding reconciliation package.
The bipartisan legislation is the culmination of months of negotiations on infrastructure and includes surface transportation reauthorization. Surface transportation reauthorizations provide multi-year funding for federal highway and public transportation programs. The Fixing America’s Surface Transportation (FAST) Act – the current surface transportation authorization – is running on a one-year extension which expires on September 30, 2021. The IIJA includes the Surface Transportation Reauthorization Act (which covers highways), the Surface Transportation Investment Act (which covers rail, motor carriers, and safety) – both of which passed out of committee with bipartisan support – and a new transit title. It also includes the Drinking Water and Wastewater Infrastructure Act and Energy Infrastructure Acts.
Unlike the House-passed surface transportation reauthorization, the Investing in a New Vision for the Environment and Surface Transportation in America Act (INVEST) in America Act, the IIJA does not include earmarks. However, it does include over $100 billion in competitive grant funding – significantly more than any other surface transportation or infrastructure investment in U.S. history.
The Senate is set to pass the Infrastructure Investment and Jobs Act (“IIJA”), a five-year, $1 trillion comprehensive infrastructure package that includes funding for transportation – roads, bridges, ports, airports, rail, and transit – as well as water infrastructure, broadband, power infrastructure, and climate resiliency. The bill, which the Biden Administration refers to as a “once-in-a-generation investment in our infrastructure,” contains $550 billion in new spending over baseline numbers, the majority of which is directed to the Department of Transportation, and includes many of the priorities that the Biden Administration first laid out in the American Jobs Plan. Once passed by the Senate, the IIJA will move to the House, where Speaker Nancy Pelosi (D-CA) has stated she will not take up the bill without a corresponding reconciliation package.
The bipartisan legislation is the culmination of months of negotiations on infrastructure and includes surface transportation reauthorization. Surface transportation reauthorizations provide multi-year funding for federal highway and public transportation programs. The Fixing America’s Surface Transportation (FAST) Act – the current surface transportation authorization – is running on a one-year extension which expires on September 30, 2021. The IIJA includes the Surface Transportation Reauthorization Act (which covers highways), the Surface Transportation Investment Act (which covers rail, motor carriers, and safety) – both of which passed out of committee with bipartisan support – and a new transit title. It also includes the Drinking Water and Wastewater Infrastructure Act and Energy Infrastructure Acts.
Unlike the House-passed surface transportation reauthorization, the Investing in a New Vision for the Environment and Surface Transportation in America Act (INVEST) in America Act, the IIJA does not include earmarks. However, it does include over $100 billion in competitive grant funding – significantly more than any other surface transportation or infrastructure investment in U.S. history.
Of the $550 billion in new spending:
- $110 billion is for roads, bridges, and major projects
- $55.5 billion in increased contract authority
- $36.7 billion for competitive and formula bridge funding
- $7.5 billion in RAISE grant funding
- $5 billion for a National Infrastructure Project Assistance grant program
- $3.2 billion in INFRA grant funding
- $500 million for surface transportation Private Activity Bonds (PABs)
- $1 billion in culvert development to help water flow
- $66 billion is for passenger and freight rail
- $6 billion for the Northeast Corridor
- $36 billion for intercity passage rail
- $16 billion for the Amtrak National Network
- $5 billion for the CRISIS program
- $3 billion for the Railroad Crossing Elimination Program
- $11 billion is for safety
- $2.24 billion in increased contract authority
- $5 billion for the Safe Streets for All program to help implement vision zero plans
- $500 million for a Strengthening Mobility and Revolutionizing Transportation (SMART) Grant Program for state, local, and community projects that use innovative transportation technologies
- $1.1 billion for NHTSA highway safety programs
- $467.5 million for the FMCSA Motor Carrier Safety Assistance Program
- $1 billion for PHMSA modernization
- $39.2 billion is for public transit
- $19.15 billion in increased contract authority
- $4.75 billion for State of Good Repair grants
- $8 billion for the Capital Investment Grant (CIG) program
- $2 billion to increase accessibility
- $5.25 billion for the Low or No Emission Vehicle program
- $65 billion is for broadband
- $42.45 billion grants to states for deployment
- $600 million in Private Activity Bonds (PABs)
- $2 billion for support to rural areas
- $1 billion for middle mile infrastructure
- $2 billion for Tribal grants
- $2.75 billion for inclusion
- $14.2 billion for an Affordable Connectivity Benefit
- $16.6 billion is for ports and waterways
- $25 billion is for airports
- $15 billion in formula funding for airports through the Airport Improvement Program (AIP)
- $5 billion in competitive grant funding for “terminal development and other landside projects”
- $5 billion for contract tower infrastructure
- $55 billion is for water infrastructure
- $23.43 billion for Drinking Water and Clean Water State Revolving Funds
- $15 billion for lead service line replacement
- $10 billion to address PFAS
- $2.5 billion for Indian water rights
- $1 billion for Bureau of Reclamation Water programs
- $1.27 billion for a water and sewer tax
- $250 million for WIFIA
- $65 billion for power and grid
- $47.2 billion for resiliency, which includes “cybersecurity to address critical infrastructure needs, waste management, flood and wildfire mitigation, drought, and coastal resiliency, ecosystem restoration, heat stress, and weatherization”
- $7.5 billion for electric vehicle charging
- $21 billion for addressing “legacy pollution,” including brownfields, superfund sites, orphan oil and gas wells, and abandoned mine lands, among others
- $8.3 billion for western water infrastructure
- $5 billion for zero-emission and clean school buses
- $2.5 billion for low-carbon and essential rural ferries
- $1 billion for reconnecting communities impacted by transportation development
Next Steps
While the IIJA will likely pass the Senate with bipartisan support, several factors will likely complicate its path forward on the House side, where the Democrats have a razor-thin majority.
The current bill includes the Senate's version of surface transportation reauthorization as part of its base text. However, House Transportation and Infrastructure (T&I) Committee Chair Peter DeFazio (D-OR) has stated opposition to the Senate surface transportation reauthorization, saying that it does not do enough regarding climate and equity, and he is pressuring Democratic leadership to include more progressive provisions from the House-passed INVEST in America Act.
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