Tax Talk
O
n April 28, President Biden unveiled the second half of his infrastructure agenda, the American Families Plan. Released just weeks after the American Jobs Plan, this new proposal is focused on providing educational, child care, family and workplace benefits. Notably, the $1.8 trillion proposal would be financed by significant tax increases that would directly affect the multifamily industry. As outlined below, the proposal would impose steep increases on tax rates and capital gains while eliminating carried interest, curtailing like-kind exchanges and repealing stepped-up basis.
32 JULY+AUGUST 2021 / EBRHA.COM
STATE OF PLAY
Prospects for enacting the American Families Plan are uncertain. Some Democratic members of Congress would like to see the proposal processed alongside the administration’s previously released $2.25 trillion American Jobs Plan that is focused on traditional infrastructure. However, others would like to first pass a traditional infrastructure package in a bipartisan manner before moving to a second proposal. Additionally, it is unclear whether all Democrats would support the administration’s proposed tax increases, which Republicans are likely to
unilaterally oppose. With their narrow majorities, Democrats will have little margin in the House and no margin in the Senate to approve extraordinarily significant revenue increases. Given this political reality, many of the Administration’s proposals may need to be modified to win approval or will end up being dropped. As Congress moves forward, NMHC and NAA will continue to educate policymakers about the key role these tax provisions play in the multifamily industry.
ANALYSIS OF PROPOSALS
Following is an exploration of the key proposals in the American Families
RAFAEL HENRIQUE/ADOBE STOCK; OPPOSITE: KELLY SIKKEMA/UNSPLASH
T A X I M P L I C A T I O N S O F T H E A M E R I C A N F A M I L I E S P L A N Courtesy of NAA
