Fact sheet describing President Biden’s “American Families Plan” in advance of the president’s speech
Fact sheet describing President Biden’s “American Families Plan”
The White House today released a fact sheet describing President Biden’s “American Families Plan” in advance of the president’s speech to a joint session of Congress this evening.
As described by the fact sheet [PDF 229 KB] the American Families Plan is intended to be an investment in children, families, and U.S. workers. According to the fact sheet, the American Families Plan includes approximately $1 trillion in investments and $800 billion in tax credits for American families and children over 10 years of age.
The fact sheet states that “alongside” the American Families Plan, the president will be proposing a set of measures to “make sure that the wealthiest Americans pay their share in taxes, while ensuring that no one making $400,000 per year or less will see their taxes go up.” It further indicates that these “tax reforms” would raise about $1.5 trillion “across the decade.” According to the fact sheet, the combined costs of the American Families Plan and the infrastructure plan the president previously proposed (the “American Jobs Plan”) would be fully offset over 15 years and the deficit would be reduced over the long term.
According to the fact sheet, the American Families Plan would extend “key tax cuts” in the recently enacted “American Rescue Plan of 2021” (Pub. L. No. 117-2) that benefit lower- and middle-income families and workers, including:
The fact sheet indicates that the president is calling on Congress to give the IRS authority to regulate tax preparers given that preparers play a crucial role in tax administration and will be key to helping some taxpayers claim the newly expanded credits.
The fact sheet indicates that the president’s tax agenda would:
The resulting revenue would be used to rebuild the middle class, invest in education, and boost wages.
The fact sheet references the following proposed changes:
The American Families Plan proposes a variety of spending programs, including:
The descriptions in the fact sheet are very high level and do not include technical detail or effective dates. More detail on the Biden Administration’s proposal can be expected in the Treasury Department’s description of tax proposals in the budget (the “Greenbook”) which is expected by late May or early June 2021.
The Biden Administration might also announce additional tax proposals as the process moves forward (including in the Treasury Greenbook). For example, several tax changes proposed by the president during the campaign have not been included in today’s release and might be included in the Greenbook. Further, Congress can be expected to add, drop, and modify proposals as it considers legislation implementing the plan. Congressional leadership, as one example, has indicated an interest in revisiting the limit on the deduction for state and local taxes.
As indicated in previous KPMG reports (including The Biden Administration and the 117th Congress: Possible Tax Legislation), the narrow margin of Democratic control in the Congress presents legislative challenges and may affect the prospects, process, and details of this proposed legislation.
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