Where Do We Stand with Taxes and the BBB Plan?

January 25, 2022

By Richard Shapiro

In his January 19 press conference, President Biden conceded the obvious with respect to his ambitious Build Back Better (“BBB”) Act. “It’s clear to me we’ll have to probably break it up,” lamented the president. As a single package, it simply will not pass the Senate and, therefore, will not become law in that form, given opposition from two Democratic senators and all the Republican senators. Proposals for extending the enhanced child tax credit and increasing spending on community colleges are unlikely to survive as discreet pieces of legislation under the BBB.

What does this mean for the BBB tax provisions? Frankly, it’s not yet clear. Will all the tax proposals be contained in one bill, or will each individual spending bill need its own funding source? There are also numerous procedural considerations involved with reconciliation that will impact what happens going forward on taxes (and the rest of BBB). For example, will 50 votes (plus Vice President Harris, if necessary) or 60 votes be required for passage of a particular bill in the Senate? And, of course, there are the impending mid-term elections, which could have a significant impact.

Several members of Congress have indicated that their support will depend on an acceptable state and local tax (“SALT”) deduction provision. Other members will likely condition their support on other provisions of importance to them.

So, it is safe to say that the legislative situation will remain rather fluid in the days and weeks to come. We will do our best to keep you informed as quickly as developments warrant.

About Richard J. Shapiro

Richard Shapiro, Tax Director and member of EisnerAmper Financial Services Group, has more than 40 years' experience in federal income taxation, including the taxation of financial instruments and transactions, both domestic and international.