New Tax Proposal Summary


May 21, 2021

Our colleagues at Blue Bell Private Wealth Management have put together a summary on Biden’s Infrastructure Plan. With their permission, we are sharing it here. Keep in mind these numbers may change. 
The recent tax proposal from the Biden Administration has made headlines as a way to help pay for the near $2.3 Trillion dollar infrastructure plan. While this is still just a proposal and many of the details remain fuzzy, we wanted to provide you with a summary of some of the changes that have been reported.
  • The top individual federal income tax rate would increase from 37% to 39.6%.
xxxxxxxxx - The income threshold is currently around $525,000 for individuals and
xxxxxxxxxx $628,000 for joint filers.
  • Increase the corporate tax rate from 21% to 28%. A 15% minimum tax would apply to corporate book income. 
  • Long-term capital gains and qualified dividends would be taxed at the ordinary income tax rate of 39.6% on income above $1 million and eliminates step-up in basis for capital gains taxation.
xxxxxxxxx - This is believed to be $1 million for joint filers.
  • Imposes additional social security taxes on wages or self-employment income over $400,000.
xxxxxxxxx - The current wage cap of $137,700 would remain in place but those
xxxxxxxxxx making more than $400,000 would pay additional tax into Social
xxxxxxxxxx Security.
  • The Biden proposal could expand the estate and gift tax by reducing the exemption amount to $3.5 million (per individual) and increasing the top rate for the estate tax to 45%. Biden would consider eliminating step-up in basis for inherited property.
xxxxxxxxx - The current exemption is $11.7 million per individual or $23.4 per couple.
  • Retain the current like-kind exchange rules for taxpayers earning less than $400,000. Taxpayers with income greater than $400,000 will be ineligible for capital gains deferral.
xxxxxxxxx - This would eliminate the current 1031 exchange for those making over
xxxxxxxxxx $400,000.
Keep in mind that this is still all a proposal with the final details still not worked out. We will continue to keep you updated as more details are released and discuss planning opportunities should they arise. 
Remember: Please note that our firm will continue to hold virtual client meetings only in order to prioritize and protect the health of our clients. 


 Edward J. Kohlhepp, Jr., CFP®, MBA

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO




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Kohlhepp Investment Advisors, Ltd.
3655 Route 202, Suite 100
Doylestown, PA 18902
Phone: 215-340-5777
Fax: 215-340-5788

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