On Sept. 13, House Democrats released legislative text detailing significant tax increases to pay for their upwards of $3.5 trillion human infrastructure bill. Those tax increases include but are not limited to: (1) increasing the top rate to 26.5% from 21% for corporations with incomes of $5 million; (2) creating a new 3% surtax on individuals/pass-through businesses with modified adjusted gross income exceeding $5 million; (3) increasing the top tax rate for pass-through businesses to 46.4 percent (39.6 percent top individual tax bracket + 3.8 percent net investment income tax (NIIT) + 3 percent surtax); (4) increasing the top capital gains rate to 31.8 percent (25 percent statutory rate + 3.8 percent NIIT + 3 percent surtax); and (5) capping the maximum Section 199A qualified business income deduction for high income individuals. The proposal also includes registered apprenticeship requirements, among other things, for entities to receive certain construction development tax incentives largely used in private construction markets. AGC opposes these proposals and will fight their enactment, as they would hinder economic recovery and growth.
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