Congressional Update: Vaccine Mandate Rejected; Debt Ceiling; Build Back Better Taxes
Last week, the U.S. Senate passed a Congressional Review Act to formally disapprove of President Biden’s vaccine mandate on private employers. The vote was 52-48, with Senators Joe Manchin (D-WV) and Jon Tester (D-MT) joining all 50 Senate Republicans.
The Senate legislation is largely symbolic as it is highly unlikely to pass the House.
The bill does send an important bipartisan rebuke of the Biden Administration’s plan.
Debt Ceiling
This week, the Senate is poised to advance a complex, but necessary, deal that will allow Senate Democrats to raise the debt ceiling through the 2022 midterms.
Republican Senate Minority Leader Mitch McConnell (R-KY) agreed to a procedural method that will allow Senate Democrats to raise the debt ceiling without Republican support.
Budget Proposal Taxes
Meanwhile, the Senate continues to negotiate a path forward for the Build Back Better Act (BBB) – President Biden’s $1.75 trillion climate change, education, health care, and tax package.
Last week, Senators from both parties are meeting with the Senate Parliamentarian to conduct the “Byrd Bath” process where many policies are either removed or modified to comply with Senate rules.
Many of the most harmful provisions (such as increases in individual tax rates, estate taxes, or corporate taxes) were not included in the House-passed bill, but there are many clean energy provisions that may be modified, such as the Electric Vehicle tax credits.
It was reported Thursday that Senate Democrats are eliminating the increased tax on vaping and nicotine products that was included in the House-passed version.
EMA and its state associations worked hard to strip the vape tax out of the bill.
Meanwhile, Senator Joe Manchin (D-WV) and others believe that the Senate will not act on the bill until after the Christmas break, though Senate Majority Leader Chuck Schumer (D-NY) is still publicly insisting that the Senate will consider the bill next week.
Many provisions in the House-passed version will be removed or modified to satisfy Senate rules.
Build Back Better Tax Provisions
On November 19th, the House passed the Build Back Better Act (the “BBB”) (HR. 5376).
In the tax area, many of the provisions which could have been very detrimental to small businesses and their owners were removed from the final House-passed version of the BBB.
For instance–
— No changes to the individual tax rates for the vast majority of Americans. No change to income tax or capital gains rates. Only those with modified adjusted gross income (“MAGI”) of more than $10,000,000 will see an increase in income taxes through a new surtax;
— No change to the estate and gift tax exemption amounts or rates for anyone;
— No change to the step up in basis for assets going through an estate. This provision could have been devastating to many small business owners and had the potential to impose a new capital gains tax on many Americans who are not “wealthy” and could have potentially caused the forced sale of family homes, farms and businesses to pay the new tax;
For a full accounting of the tax provisions that are in the final bill, go to SBLC Alert BBB Tax Provisions.
