With all eyes on President Biden and his first 100 days, the reality is that a slim Democratic majority in Congress and the need to address the overwhelming health and economic effects of COVID-19 mean that enacting sweeping tax legislation is unlikely early in his first year in office. However, that doesn’t mean that some of President Biden’s campaign tax policy agenda won’t be implemented.
Legislation isn’t the president’s only tool for realizing his tax policy goals. Regulatory and administrative actions are powerful tools a for the president to use to move forward with his tax policy agenda.
While legislation is required to make many of the tax changes that President Biden proposed during his campaign, the administration might consider regulatory action in the following areas to more quickly move closer to achieving its tax policy goals.
Previously introduced bills and tax proposals provide clues about legislation that the current Democrats in Congress might introduce.
For instance, many of the tax proposals included in President Biden’s campaign materials were described in the “General Explanations of the Administration’s Fiscal Year 2017 Revenue Proposals” that accompanied the budget for fiscal year 2017. Other campaign tax proposals are included in bills that recently were introduced or passed in the House, such as the Securing a Strong Retirement Act of 2020 and the Social Security 2100 Act.
President Biden’s campaign proposals included significant tax increases for corporations and wealthy individuals that some thought would be enacted immediately after he took office. Given the current economic and political climate, however, immediate increases in taxes on corporations or wealthy individuals seem unlikely.
In addition, remarks from administration officials indicate a hesitancy to retroactively raise taxes. Given Congress and the president’s other priorities, it is unlikely that a tax legislation package not related to COVID-19 will be effective before 2022.
In the meantime, the U.S. Department of the Treasury and the IRS are likely to work on regulations and other administrative action to move President Biden’s tax agenda forward. Whether these new rules will apply to the 2021 tax year will depend on how quickly they are issued.
Deep expertise on tax policies