In late April President Biden and the White House laid out the first draft and details of the American Families Plan. The $1.8 trillion package proposes sweeping legislation which the White House refers to as a once-in-a-generation investment in our nation’s future. Among many things, the American Families Plan proposes to:
- Provide an additional four years of free education (two years of pre-school and two years of community college) for all children, along with allocating funds to make college more affordable for low- and middle-income students.
- Provide direct support to low- and middle-income families related to childcare as well as creating a national paid family and medical leave program.
- Extend tax cuts and tax credits to low- and middle-income workers and families.
The Plan has proposed to fund the plan through a variety of tax increases targeted at more affluent Americans. Some of the more notable increases being proposed are raising the top tax rate on Americans earning more than $400,000 per year, increasing the capital gains tax rate for Americans making more than $1 million per year and a variety of changes which would serve to increase estate taxes at one’s death.
There is much work to do in Washington before any of this is written into law so it is uncertain as to what will actually pass. We are keeping a close eye on this and once we know more details as to what will actually become law, we will work with our clients and their accountants to develop appropriate strategies for those who are directly affected. We believe it is premature to make any dramatic changes at this point in time.
If you are concerned about potential tax increases, or any other proposals being debated on Capitol Hill, please give us a call. We'd welcome the chance to hear your perspective, and hopefully, we can provide some guidance.
Matt and Andrew