News and Analysis
What’s In Latest Build Back Better Tax Package?
November 5, 2021OMA Connections Partner Schneider Downs summarizes the refurbished Build Back Better tax package that the White House released last week, noting that the cost of about $1.75 trillion of the revised 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. 11/4/2021
U.S. Corporate Tax Revenue Matches All-Time High
October 29, 2021The federal government took in an estimated $370 billion in corporate tax revenue over the past year (fiscal 2021), matching the record set in 2007. The Tax Foundation says this high level of revenue calls into question efforts by some policymakers to raise the corporate tax rate and other corporate taxes based on claims of relatively low tax collections resulting from the 2017 tax reform.
Meanwhile, the federal government collected a record of nearly $4.05 trillion in overall taxes in FY 2021 — nearly 15% above the level collected before the 2017 tax cuts. But federal spending also hit a nominal high of nearly $6.82 trillion. 10/26/2021
Biden Proposes $1.75 Trillion Spending Bill; Infrastructure Vote Delayed
October 29, 2021On Thursday, Oct. 28, the White House issued a revised plan for $1.75 trillion in social and climate-related spending. The proposal would raise revenue by imposing a 15% minimum tax on the profits of larger corporations; adopting a 15% minimum global tax; applying a 5% surtax on individual income above $10 million (8% surtax on income of more than $25 million); and strengthening IRS tax enforcement.
CNBC reports there are two other provisions in Biden’s Build Back Better framework related to business income: a 3.8% Medicare surtax to all income from pass-through businesses, and a limit to tax breaks for business losses.
Despite the administration’s aggressive push, it’s unclear whether the Biden spending plan has the full backing of Democrats in the House and Senate. As a result, House leaders abandoned plans for a Thursday vote on a separate infrastructure bill. House progressives want the two bills be voted on as a package. 10/28/2021
NAM’s Timmons: Keep Pressure on Capitol Hill
October 29, 2021President Joe Biden said late last week there weren’t enough Democratic votes to raise corporate tax rates. In response, President and CEO of the National Association of Manufacturers (NAM) Jay Timmons urged manufacturers “to keep up the pressure” in opposition to proposed tax hikes.
Watch NAM’s latest ad, which is part of a massive ad campaign. Then share your perspectives with your members of Congress via NAM’s “Manufacturers United” site. 10/27/2021
Ohio Virtual Tax Academy Is Nov. 17
October 29, 2021Business owners and others who want to learn the latest Ohio tax news and insights from staff at the Ohio Department of Taxation are invited to participate in the Ohio Virtual Tax Academy, set for Nov. 17. This complimentary online event will cover legislative updates, personal and school district income tax updates, and electronic filing of W-2s and 1099-Rs. Learn more. 10/27/2021
Report: Ohio Misspent $3.8B in Unemployment Funds
October 29, 2021A new audit shows Ohio misspent more than $3.8 billion in unemployment funds between April 2020 and the end of June 2021. According to State Auditor Keith Faber’s office, a lack of internal controls and outdated technology resulted in the Ohio Department of Job and Family Services (ODJFS) mistakenly paying $3.4 billion due to errors — and more than $477 million due to fraudulent claims.
ODJFS Director Matt Damschroder, who replaced Kimberly Henderson as agency chief earlier this year, noted that several improvements to the system have already been made thanks to the efforts of a public-private partnership organized by the governor. 10/28/2021
Still Time to Claim the ERC
October 29, 2021There’s still time to claim the Employee Retention Credit (ERC) for all available quarters in 2020 and 2021, according to OMA Connections Partner GBQ Partners. The firm notes that even if your company thinks it’s not eligible, it’s worth a second look. And some employers that weren’t eligible for 2020 or for an earlier quarter in 2021 may be eligible now. 10/28/2021
Federal Carbon Tax Gets Another Look
October 22, 2021The U.S. House’s $3.5 trillion spending plan contains a proposed Clean Electricity Performance Program (CEPP), which would pay utilities that increase their share of clean energy while penalizing those that don’t. But the CEPP faces strong opposition from Republicans and U.S. Sen. Joe Manchin (D-W. Va.). In its place, a carbon tax has been floated, Politico reported this week.
The AP notes that a “middle ground” proposal could include “tax credits for energy producers that reduce emissions, and pollution fees to be paid by industries for every ton of carbon dioxide they emit.” Other media sources say the carbon tax faces “massive political headwinds.” 10/20/2021
Tax Planning Guides, Rate Information Available
October 22, 2021OMA Connections Partner RSM has published its annual tax planning guides, which provide succinct analyses, tips, rate charts, and other useful information to help with tax planning. The guides are available here. 10/21/2021
Should You Claim a Q4 Employee Retention Credit?
October 22, 2021The Employee Retention Credit, established by federal COVID-19 law, terminated on Sept. 30. Under current law, only “recovery start-up businesses” qualify to claim the credit for Q4 of 2021.
According to this insight from OMA Connections Partner CliftonLarsonAllen, Congress may yet reinstate the credit for the remainder of the year, but there is no guarantee. 10/20/2021