White House Unveils 2023 Federal Budget

The White House on March 28, 2022, released its 2023 budget proposal. This document represents the Administration's aspirational but not always attainable policy positions. Nevertheless, the proposed budgets always offer a useful window into an Administration's thinking. 
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The White House on March 28, 2022, released its 2023 budget proposal. This document represents the Administration's aspirational but not always attainable policy positions. Nevertheless, the proposed budgets always offer a useful window into an Administration's thinking. 

The Budget folds most of the House-passed Build Back Better Act into the baseline. The Budget reiterates previous proposals to electrify the federal fleet and provide funding for states to build out charging stations across the United States.  

The Budget establishes very few new transportation and infrastructure policies, generally content to reaffirm full support and funding for programs and policies that were included in the bipartisan infrastructure bill that Congress passed last year. 

The proposal includes major tax increase proposals, even though Congress has little appetite for passing some of them or they face firm opposition from one or more key Senators in the 50-50 Senate. Examples of these proposed tax increases include increases in the corporate and individual tax rates that were previously proposed by the Administration or congressional Democrats but were rejected as the Build Back Better Act was put together in the House.  

The Budget also includes a new minimum tax on wealthy individuals, called the "billionaire's tax."  

Specifically, it would impose a 20 percent minimum tax on total income, inclusive of unrealized capital gains, for taxpayers with wealth of greater than $100 million.  The proposal would allow for spreading the first year of minimum tax liability in equal installments over nine years, and then five years for top-up payments on new income going forward.  Payments of the minimum tax would be treated as a prepayment that would be credited against subsequent tax on realized capital gains.  

Senators have proposed varying forms of wealth taxes; but this is the first such proposal from the Biden Administration.  Officials had previously expressed concern about implementation difficulties. Nevertheless, the plan is noteworthy because it comes amid signs that the Biden Administration is reviving negotiations with Sen. Manchin.  

Reproposed from the prior budget is a similar set of provisions to cut benefits for fossil fuel producers. These proposals include repeal of expensing intangible drilling costs, repeal of percentage depletion with respect to oil and natural gas wells, and increasing the geological and geophysical amortization period for independent producers.  

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