The FY23 Budget baseline does not include the House SALT cap relief provision. The House-passed bill also included some taxpayer-favorable provisions, including a measure that would reinstate current deductibility for Section 174 research expenditures that became subject to amortization in 2022 under a provision of the 2017 tax reform act and relief from the current cap on individual itemized deductions for state and local taxes (SALT). That bill includes more than $1.5 trillion in business, international, and individual tax increase provisions, but certain Administration tax proposals such as a corporate rate increase, were not included in the bill due to opposition from moderate Congressional Democrats. The FY23 Budget and Green Book generally assume the previously proposed tax provisions from the House-passed ‘Build Back Better’ reconciliation bill (H.R. Finally, the FY23 Budget requests a total of $14.1 billion in funding for the IRS, including investments in IRS tax enforcement intended to increase tax compliance. The FY23 Budget also features individual tax increase proposals, including a new proposed 20% minimum tax on taxpayers with net wealth greater than $100 million. Additionally, the FY23 Budget asserts that it would prevent MNCs from using tax havens to “game the system,” reiterating the Biden administration’s commitment to the OECD’s Pillar Two proposal. The FY23 Budget would raise the corporate tax rate to 28%, complemented by other changes to corporate tax provisions intended to incentivize job creation and investment in the United States. The White House summarizes the tax provisions of the FY23 Budget as outlining steps toward a fairer tax code that encourages investment in the United States, stops the shifting of jobs and profits abroad, and ensures that corporations and high-income individuals “pay their fair share.” Also on March 28, the US Treasury released the General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals, commonly referred to as the ‘Green Book.’ The Green Book explains the revenue proposals in the President's budget and serves as a guidepost to Congress for tax legislation by describing current law (adjusted baseline), proposed changes, the rationale from a policy perspective, and Treasury’s revenue projection. The White House released its Fiscal Year 2023 Budget (‘FY23 Budget’) on March 28.
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