It is the middle of summer and, yes, we still have tax and upcoming legislation on our minds. Here’s the latest.
The Senate appears ready to pass a $1 trillion infrastructure bill that has been the subject of intense negotiation between Democrats and Republicans for about 4 months now. It would involve $550 billion of new spending over 5 years, and $450 billion of previously-approved but unspent funds, and it would be the largest infrastructure investment in over a century. The bill is reportedly more than 2,700 pages long and it would provide funding for roads and bridges ($110 billion), clean water ($55 billion), passenger and freight rail ($66 billion), an upgraded power grid ($73 billion), car charging stations ($7.5 billion), public transit ($39 billion), broadband access and expansion ($65 billion), and many other projects. It would be paid for with things like selling oil from the U.S. Strategic Petroleum Reserve in 2028 ($6 billion), requiring broker reporting of cryptocurrency transactions ($28 billion), tapping unspent COVID-relief aid ($205 billion), and selling spectrum for 5G services ($87 billion). The bill has the support of 17 Republicans, including Senate Minority Leader Mitch McConnell.
For any business that is claiming the employee retention credit (ERC) in 2021, pay special attention to section 80604 on page 2,437 of the bill (H.R. 3684). That provision would terminate the ERC at the end of Q3 2021, and would prevent businesses, other than recovery startup businesses, from claiming the ERC in Q4 2021. This provision has not received much, if any, attention in the press, but it is currently in the bill.
What’s not in the bill? Tax increases. While that is something to be thankful for, don’t break out the champagne just yet because they are still coming. Democrats have announced that they are turning their attention to a $3.5 trillion reconciliation bill that would be filibuster-proof. Sen. Bernie Sanders has announced that he has the support of all 50 Democratic senators to pass President Biden’s $3.5 trillion “human infrastructure” bill, and Senate Majority Leader Chuck Schumer has committed to moving that bill forward along with the infrastructure bill on a “two-track” approach. House Speaker Nancy Pelosi will make sure that happens because she stated she will not bring the infrastructure bill to the floor of the House until the Senate acts on the reconciliation bill.
We will keep you updated as the legislative process unfolds.
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