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AICC partner The Small Business Legislative Council asks “Are New Taxes Likely in 2021?”
This is a key question that the SBLC is closely monitoring as the new Biden Administration continues to settle in after their first month in office. As of the writing of this report, no significant legislation which would increase taxes has yet to gain any momentum in the House or Senate. However, during the campaign President Biden proposed a number of new taxes and changes to the tax code. Some believe that at least some of his tax plan will be included in a second budget reconciliation bill. Even though at least some are convinced that a second reconciliation bill would be used to increase taxes (as outlined below), others believe it may be used for infrastructure only or a combination of both increased taxes and new spending for infrastructure.
The argument against raising taxes this year is while the country is in a recession and the new COVID stimulus bill is likely to stimulate our economy it makes no sense to pass a major tax bill, including a significant tax increase to corporations, which would have a depressive impact on our economy. While our deficit is significant, the cost of borrowing remains low so a strong argument can be made that it is more important to get out of the recession and get people back to work first. Increasing taxes on the corporations at a time when they would hopefully be responsible for a good deal of needed reemployment of their employees does not seem to make sense.
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