(perhaps so many that I should use 2💩emojis😬)

OK, time to get this show on the road!

We now have a draft version of Subtitle I of Dems proposed legislation. And WOW is there a lot to discuss.

You might want to buckle up, b/c this is going to be a bumpy ride...

...The final version of this bill isn't likely to come anywhere near the length of some more recent pieces of legislation, but Subtitle I (pictured below), which has the bulk of the tax changes most planners will be concerned with, still clocks in at over 225 pages... Image

...Add in provisions that expand/enhance the Child Tax Credit + the Child and Dependent Care Credit and there are about 300 pages w/ major planning implications.

In fact, upon quick glance, if enacted, this would have a MUCH bigger impact on planning for some than TCJA! 👀

Alright... Subtitle I is officially titled "Responsibly Funding Our Priorities."

I consider this a lost opportunity for Chairman (Richard) Neal, who, to lighten the mood + give a nod to an all-time great band formed in his home state (Mass), could have gone w/ (drumroll)...

"Subtitle I -- Eat the Rich"

Indeed, Subtitle I is packed full of provisions designed to help reduce net the cost of various spending initiatives, mostly by raising taxes on those w/ income above $400,000 (which is about the top 2% of households)...


...Section 138201 of the draft would "squish" the current 32% bracket a bit, the current 35% bracket a lot (to a fraction of its current size), and would create a new top bracket of 39.6% above that.

I quickly put this👇together (if you see mistakes, lemme know)

Notably... Image

...the income levels at which the top rate of 39.6% would kick in are actually LOWER than the income levels proposed by President Biden earlier this year via his budget request🤔

This could be just a negotiation tactic on the part of House Dems, knowing the more...

...moderate Senate Dems will likely want to raise the thresholds from whatever they see first. Or maybe it's in an effort to try and manage the net cost of the bill?

Who knows, and frankly, who cares? It's in there now.

In addition to increasing the top ordinary tax...

rate, the bill would also increase the top capital gains bracket. But, and this is a big but...

...It's a MUCH smaller increase in the top rate than had been proposed by Biden. Biden had proposed making the top cap gains rate equal to the top ordinary income tax rate of 39.6%.

This bill proposes a much more modest increase in the top cap gains rate, to a max of 25%...
GAH! Seems there was a break in the Twitter space-time continuum. The "fun" continues below!

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More from @CPAPlanner

13 Sep

Sounds good, right? But there's a catch... This change is FANTASTIC for the uber-wealthy.

For the 'merely' affluent taxpayer though? Not so much😕

Specifically, whereas Biden's proposed top rate didn't kick in until AGI exceeded $1 million, the bill would "re-align"...

..the capital gains brackets with the ordinary income tax brackets (make them start at the same $ amounts).

Great for remembering where brackets begin, but...

...it means the top cap gains bracket would start at 'just' $400k for single filers and $450k for joint filers...

So if you're income is $4 million and consists of a lot of capital gains, you have to be feeling pretty good right now.

But if your income is between $400k/$450k and $1 million and you have capital gains, you'd MUCH prefer the Biden plan to this bill (at least for this)
Read 76 tweets
11 Sep
OK, here's the deal... upon a quick first glance (as in 'reading 645 pages in 15 minutes quick), this does not appear to be "The Big One."

It's a lot of tax stuff, but nothing on step-up changes, cap gains rate changes, a new top ordinary rate, etc.


That is likely to follow here, in the near future (as soon as Democrats can come to an agreement, themselves, as to what it should say).

The significant items in here for planners appear to be primarily in "Subtitle H-Social Safety Net"

Included there are...

...(further) extensions/expansions of:
- Child Tax Credit (about 10% of the whole bill text related to the CTC🤯)
- Child and Dependent Care Credit

There would also be a:
- Payroll tax credit for wages paid Child Care Workers
- New credit for Caregiver expenses
Read 4 tweets
7 May

Ok... kids are asleep, I've finished reading the bill, so buckle up!

It's "Go time!"

We're gonna break down HR 2954, better known as "Securing a Strong Retirement Act of 2021."

( And even better known as SECURE Act 2.0!)

Here's the bill text:

As always, I want to start with some high-level thoughts...

This one clocked in at 146 pages. While that pales in comparison to recent legislative endeavors (cough, cough... looking at you CAA ) its worth a reminder that this is 100% retirement stuff!

So, there's actually a TON to digest here for planners.🙌

Certainly more than we got from CAA. Maybe even more, in total, than we got from the original SECURE Act (though no one provision will have the impact that the 'death' of the 'stretch' had).😯

Now, do I think this...
Read 56 tweets
1 Mar

OK, the House passed the American Recovery Plan LATE Friday evening, so let's do this thing...

For starters, here's the bill text: docs.house.gov/billsthisweek/…

At 'just' 592 pages, it's a relatively brisk read compared to the 6k-page Consolidated Appropriations Act December...

...The most important thing to know at this point is this is NOT law yet. And for that matter, there's about a 0% chance this EXACT bill becomes law.

Dems seem resigned to passing this round of stimulus relief w/out bipartisan support (that many had hoped for)...

...To do that, Dems will use the legislative process known as Reconciliation.

2🗝️things to know about Rec:

1) It allows the Senate to pass a bill w/ 'just' a simple majority (vs the 60 votes it normally takes for cloture)

2) It can only contain budget-related provisions...
Read 25 tweets
14 Jan

Alright, I've got ahold of the 19-page "Fact Sheet" for the Biden "American Rescue Plan." (Thanks @TaxNotes!)

This is prob the best we're going to get for now, so I'm gonna use this to break down some of the proposals of the Plan relevant to tax and financial planning...

The American Rescue Plan would provide additional stimulus checks of $1,400 per eligible person. Together w/ the $600 amounts that were/are being paid via the Appropriations Act in December, it brings the total value of recent payments to $2k/ eligible person.


... this is one policy initiative where Biden and Trump share a vision🤷‍♂️

The Plan also calls for expanding the types of people eligible for stimulus checks to include adult dependents (presumably to include many college students and elderly parents)...
Read 18 tweets
8 Jan

Joe Manchin has come out strongly against $2,000 stimulus checks.💸💸💸

A quick thread on what this means ...

With the wins by Warnock and Ossoff earlier this week, and combined with independents who caucus with them, Dems will control 50 of the 100 seats.


in the event of a tie, the VP (who's also the President of the Senate) casts the deciding vote, effectively giving Dems control of the Senate.

Notably, though, Manchin IS a Democrat.

Thus, if Ds lose Manchin and Rs hold party line, they can't pass a bill increasing the...

stimulus checks to $2k/person.

What makes this whole thing really interesting, and somewhat unique - at least lately - it that there are a bunch of R Senators that largely support the $2k stimulus checks (which notably were supported by Pres. Trump).

But those Rs are...
Read 8 tweets

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