Tax Reform 2021 – Build Back Better: President Biden’s Updated Framework as of October 28, 2021

As we noted in our recent letter on October 25, The Tax Evolution Continues article, President Biden and democratic leaders in both the House and Senate have been intensely, and often passionately, working on developing a new framework that would be acceptable by both moderate and progressive wings of their party. On Thursday, October 28, the White House released a refurbished framework hoping to build unity within the Democratic party concerning spending priorities and the revenue-raising needed to support additional programs.

Almost simultaneously with the release of the framework, a draft copy of the updated legislation, H.R. 5376 Build Back Better Act, was released by the House Rules Committee.

At a cost of about $1.75 trillion, the newly released framework is approximately 60% of the size of the former $3.1 trillion proposal. While details still need to be reviewed, it appears that the revenue raised by new provisions will be about $2 trillion. The White House is reporting that the “plan is more than fully paid for by asking the wealthiest Americans and most profitable corporations to pay their fair share. It does not raise taxes on small business and anyone making less than $400,000 per year. It will also generate economic growth that will increase tax revenue and contribute to deficit reduction.”  

A White House press release notes that “The Build Back Better framework includes a new surtax on the income of multi-millionaires and billionaires – the top 0.02 percent of Americans. It would apply a 5 percent rate above income of $10 million, and an additional 3 percent above income of $25 million. The Build Back Better framework will also close the loopholes that allows some wealthy taxpayers to avoid paying the 3.8 Medicare tax on their earnings.”

The new proposal substantially re-writes the tax-related provisions in the previous incarnation of the Build Back Better Act. A White House Fact Sheet provides the following information on some of the tax-related provisions:

  • 15% Corporate Minimum Tax on Large Corporations
  • 1% Surcharge on Corporate Stock Buybacks
  • Global Minimum Tax: Consistent with OECD and with appropriate effective date for 15%, Country-by-Country
  • Penalty Rate for Foreign Corporations Based in Non-Compliant Countries (i.e., Base Erosion and Anti-Abuse Tax)
  • New Surtax on Multi-Millionaires and Billionaires
  • Close Medicare Self-Employment Tax Loophole by Strengthening the Net Investment Income Tax for Those Making Over $400,000
  • Continue Limitation on Excess Business Losses


The new legislation removes the increases in corporate and individual tax rates, including the proposed increase in individual capital gain tax rates, proposed under the previous version of the Build Back Better legislation. Other provisions that have been removed include provisions related to:

  • Taxation of carried interests, 
  • Changes in the limitation of the 20% Section 199A qualified business income deduction for pass-through income, 
  • Changes to the estate tax, and 
  • Changes to individual retirement savings accounts. 

We are analyzing the newly released proposed legislation in more detail. We will continue to provide ongoing insight into the impact, challenges and opportunities presented by the newly proposed rules.

Is this the last word on proposed legislation? Using recent history as a guide, the answer may be “no”. Based upon a review of the legislative activity over the past 8 months coupled with insight gained from observing the Republican Party’s experience with negotiating and writing the final version of the Tax Cuts and Jobs Act leading to its signing on December 22, 2017, we could again observe changes that reintroduce both spending and tax provisions that were included in the original proposal. 

We close as we did with our first letter. As we’ve seen since April, and as Yogi Berra once so astutely stated, “it ain’t over until it’s over.” As with all proposed tax legislative changes, taxpayers and advisors will need to monitor progress closely. We will continue to monitor developments as these proposed changes move through the legislative process. Additional articles and analyses will be provided in the coming weeks. In the meantime, if you have any questions, please reach out to your Schneider Downs tax consultant, or contact us at [email protected].


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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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