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TAX TAKE: Time Keeps On Slippin', Slippin', Slippin' Into The Future

Tax Alert

The legislative timeline for consideration and potential enactment of the Build Back Better Act reconciliation bill continues to slip, as Congressional Democrats and the Biden Administration carry on with negotiations to develop a spending and tax package that can secure the support of both the progressive and moderate wings of the party. Simultaneously, Congress must also address a number of other significant fiscal issues that are impacting the timing of the reconciliation bill. Surface transportation funding will run out on October 31 and Speaker Pelosi has set that date as the new target date for consideration of both the reconciliation bill and the pending bipartisan infrastructure bill, although that date seems ambitious given the status of the current reconciliation bill negotiations.

Assuming the October 31 date does slip, the next legislative deadline would not be until December 3, when the current continuing resolution to fund the federal government expires and Congress will need to lift the debt ceiling (assuming the House passes the pending Senate bill to provide a short-term extension). And, of course, December 31 heralds the expiration of a host of "tax extenders," as well as implementation of a number of important TCJA provisions, including the amortization of research and development expenses and the reduced interest expense deduction limitation, both of which are set to become effective in 2022. Thus, there is the potential that December 3 or December 31 becomes the backstop for Congress to address the reconciliation bill and the bipartisan infrastructure bill. Needless to say, things remain quite fluid, but it is important to monitor these pending legislative deadlines as they provide an opportunity for potential action. #TaxTake

Timeline of dates described in the alert

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In the News

Jorge discussed the spending bills currently under consideration by Congress in InvestmentNews. He said the uncertainty regarding U.S. tax rate changes could run well into December. "I don't think Congress will be willing to move ahead until the CBO weighs in on how much the bills will cost and their effect on the deficit," Jorge said

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