White House releases Fiscal Year 2024 Budget including tax revenue proposals

by | Mar 10, 2023

TAX ALERT | March 10, 2023

Executive summary: Release of president’s Fiscal Year 2024 Budget unlikely to spur action in Congress

The Biden Administration released its Fiscal Year (FY) 2024 Budget, which proposes investments that, according to the administration, would be paid for and would reduce the deficit by almost $3 trillion over the next decade through proposed tax increases. Unlike prior budget submissions from this administration, the FY24 Budget was released to a divided Congress and expectations are very low that the proposals will be enacted into law during the 118th Congress. However, certain components, such as proposed changes to reform the international tax system to (among other things) bring it into compliance with the OECD Pillar 2 global minimum tax regime should be monitored by those that are potentially impacted. 

The Treasury Department also released their “Greenbook” explanation of the revenue proposals in President Biden’s FY24 Budget. The Greenbook provides additional details on the tax provisions included in the budget, and for the most part, tracks very closely to prior Greenbook explanations issued under this administration. 

White House releases Fiscal Year 2024 Budget including tax revenue proposals

The Biden Administration has released its FY 2024 Budget, (FACT SHEET: The President’s Budget for Fiscal Year 2024) which, according to the Office of Management and Budget, would generate an approximately $3 trillion-dollar reduction in the deficit over a 10-year window. This reduction would largely stem from more than 100 proposed changes to the tax law – many of which are carried over from previous years- that are projected to raise more than $4.7 trillion dollars in new tax revenue over the next 10 years. 

In conjunction with President Biden’s Budget, the Treasury Department released its General Explanations of the Administration’s Fiscal Year 2024 Revenue Proposals. This document, referred to as the “Greenbook,” provides detailed explanations of the 100-plus revenue proposals in the Budget.   

Notable tax proposals in the Budget include: 

  • Increasing the corporate tax rate from 21% to 28% 
  • Restoring the top tax rate of 39.6% for individual taxpayers, up from the current 37%, (which, when combined with the proposed 5% Net Investment Income Tax, would actually bring the highest rate to 44.6%.)
  • Increasing the Net Investment Income Tax to 5% and expanding the base to include business income 
  • Increasing the capital gains tax rate for certain high-income individuals
  • Adding a new minimum tax on certain on high-net-worth individuals that would include a tax on unrealized gains
  • Addressing divisive reorganizations and losses recognized in certain corporate liquidation transactions
  • Increasing the tax on corporate stock buybacks from 1% to 4%
  • Reforming the rules for taxing international income
  • Eliminating tax incentives for fossil fuels

Other proposals – such as taxing carried interest as ordinary income, taxing capital gains at ordinary rates for taxpayers with income over a certain threshold and ending tax free like-kind exchange treatment for real property – are also carried over from prior years. The budget also indicates that the administration would address various tax cuts sunsetting after 2025, but does not address any provision specifically. 

While these proposals are unlikely to become law in their current form in the near term, they are still important in understanding what may be addressed in future legislation. 

RSM US LLP will be providing additional information on these developments as warranted. 

Questions or Want to Talk?

Call us directly at 972.221.2500 (Flower Mound) or 940.591.9300 (Denton),
or complete the form below and we’ll contact you to discuss your specific situation.


This article was written by Matt Talcoff, Ryan Corcoran, Fred Gordon, Kyle Brown and originally appeared on 2023-03-10.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/tax-alerts/2023/White-House-releases-Fiscal-Year-2024-Budget-including-tax-revenue-proposals.html

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

 

RSM

KHA Accountants, PLLC is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.

For more information on how KHA Accountants can assist you, please call 972.221.2500.

Which Game are You Trying to Win?

Navigate the tricky crossroads of sports and business with KHA Strategic Consultants as we shed light on the key to defining success in your organization. Drawing parallels from football, we discuss the importance of focusing on the right metrics – not just the convenient ones…

Bakes Takes Volume 1, Issue 4

Join Jonny Baker in his monthly roundup of must-read articles for leaders, featuring insights on leadership team reinvention, effective learning strategies, and the true drivers of job satisfaction. Dive in to explore these perspectives and equip yourself with new strategies for creating vision, alignment, and execution in your team.

Pulled in Too Many Directions?

Ever wonder why you’re constantly solving problems, yet your business is not growing? Read this parable about a gardener which illustrates the dangers of losing sight of what’s really important.

Are You Prepared for Battle?

Resources are limited, time is short, and enemies are real. To win the war in your market, you need to know yourself. Learn how to redefine your business strategy for today’s competitive landscape through KHA’s Dynamic Business Advising.

Bake’s Takes Volume 1, Issue 3

In this month’s Bake’s Takes, Jonny Baker explores the shift in leadership dynamics and the value of unleashing employee creativity. Baker discusses the need for a daring, contrarian mindset for breakthroughs and the power of asking the right questions. Gain insights from his top three recommended reads to navigate the complexities of change and strategic management.

Where Do I Look?

Ever felt like finding a solution to your business problem is like finding a needle in a haystack? Just as a needle is found by stepping back from the haystack, let KHA Strategic Consultants give you the outside perspective to find your answers. Contact us today for an objective assessment of your business and a proven path to success.