Over the last month, President Biden has discussed various tax proposals that will increase income taxes on businesses and high-income individuals. In the last week, we have learned more about what some of those proposals specifically entail.

While the Biden administration recognizes that these proposals may change as they go through the legislative process, here are a few of the key tax provisions that President Biden is currently proposing:

• Increase the corporate income tax rate from 21% to 28%;
• Increase the maximum tax rate for individuals from 37% to 39.6% (where it was before the 2017 Tax Cuts and Jobs Act);
• Increase the capital gains rate from 20% to 39.6% for taxpayers with adjusted gross income in excess of $1 million (this may be lowered to $400,000);
• Repeal the 20% deduction for pass-through business owners on their qualified business income, although the repeal may be limited to those making more than $400,000;
• Repeal Section 1031 like-kind exchange treatment on real property if deferred capital gains are in excess of $500,000;
• Permanently restrict the use of excess business losses;
• Treat profits from carried interests as ordinary income; and
• End the step-up in basis for those with capital gains over $1 million ($2.5 million for couples) that is received when inheriting property after a death.

Given the slim majority in the Senate, it is unclear to what extent these tax increases will survive the legislative process, at least in their current form. We will monitor the status of these tax proposals and provide updates as they occur.