Article | Tax alert

Treasury releases fiscal year 2025 Green Book: Details on Biden Administration’s tax proposals

March 12, 2024

On March 11, 2024, the White House released President Biden’s fiscal year 2025 budget proposal and the U.S. Treasury released the accompanying General Explanations of the Administration's Fiscal Year 2025 Revenue Proposals, a document commonly referred to as the “Green Book.” As expected, the president’s plan calls for tax increases on corporations and high-income individuals (defined as those with annual incomes exceeding $400,000). The plan, if enacted, would reduce the federal budget deficit by an estimated $3.3 trillion over a decade.

The budget and Green Book provide details of the revenue proposals President Biden set out during his State of the Union address last week. Major revenue raisers include increasing the statutory corporate tax rate to 28% and minimum corporate tax rate to 21%, making global tax reforms, instituting a 25% minimum tax on taxpayers with wealth greater than $100 million and reforming other tax provisions for high-income taxpayers. Below we provide more details on the plan’s notable provisions.

Likelihood of enactment

The budget and associated Green Book detail President Biden’s recommendations for federal funding in accordance with the Administration’s policy priorities. Congress isn’t required to consider or enact anything included in the president’s budget; however, it often influences the congressional budget process.

There is limited opportunity for significant tax legislation during the remainder of the 118th Congress, as evidenced by its struggles to enact even bipartisan compromises. For almost six weeks, the Senate has been unable to pass a bipartisan, bicameral tax deal that sailed through the House of Representatives with an overwhelming vote of 357-70. Several prominent Senators have expressed a desire to delay any tax negotiations until 2025, when they believe they may have more negotiating power.

Ultimately, while the Republicans control the House and the Democrats retain only a simple majority in the Senate, one that cannot overcome a filibuster, there is no realistic possibility for any legislation resembling Biden’s proposed budget.

Looking ahead

All eyes are on the 2024 election, as control of the House, Senate and White House will be up for grabs. The outcome of the election is sure to influence the future of tax policy, which is particularly significant as we approach the Jan. 1, 2026, expiration of numerous Tax Cuts and Jobs Act (TCJA) provisions. Unless Congress takes action prior to the expiration date, many individuals and pass-through businesses will see considerable tax increases.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments. Baker Tilly US, LLP does not practice law, nor does it give legal advice, and makes no representations regarding questions of legal interpretation.