Pub. 3 2021 Issue 5

S E P T E M B E R / O C T O B E R 2 0 2 1 14 nebraska cpas BY JEFF SCHAFFART AND NICHOLAS BJORNSON, KOLEY JESSEN C O U N S E L O R ’ S C O R N E R TAX INCREASES PROPOSED FOR HIGH-INCOME INDIVIDUALS & BUSINESSES On Sept. 13, 2021, the House Ways and Means Committee released proposed legislation that includes several proposed tax increases focused on high-income individuals and corporations. The proposed tax changes are to be incorporated in the budget reconciliation bill known as the “Build Back Better Act.” It would increase the top capital gains rate from 20% to 25%, raise the top individual marginal tax rate from 37% to 39.6%, and impose a 3% surtax on individuals’ income above $5 million. Any final piece of legislation will have to be enacted into law. This article, which is current as of Sept. 15, 2021, summarizes some of the major tax provisions included in the proposed legislation. Individuals • Increase the Top Federal Marginal Rate from 37% to 39.6% The proposed top federal marginal rate of 39.6% would apply to married individuals filing jointly with taxable income over $450,000; to heads of household with taxable income over $425,000; to unmarried individuals with taxable income over