Ron Kerridge Quoted in ‘Dallas Business Journal’ on Tax Implications of Build Back Better Act

December 6, 2021 | Mentions

With the U.S. Senate set to consider H.R. 5376, Build Back Better Act, Jackson Walker partner Ronald D. Kerridge spoke with the Dallas Business Journal about changes to the bill and the potential impact on mergers and acquisitions (M&A) and private equity.

“One thing that still has some effect in terms of people’s thinking around the timing of deals are the proposed surtaxes,” Ron said. If the bill passes, beginning January 1, 2022, there will be a 5% surtax on adjusted gross income for individuals who make $10 million, and the surtax will go up by another 3% for those who make $25 million or more.

The bill also proposes increasing the state and local tax dedication limitation from $10,000 to $80,000, which would continue through 2030 if passed.

“That’s primarily helpful in states that have high levels of state taxation, particularly as it pertains to income tax,” Ron said. “It has an impact on Texas, as well, due to high property taxes.”

However, Ron noted the bill’s passage is questionable, stating, “Those tax increases are consistent with a larger number on the spending side. My sense is the appetite for a really large bill on the spending side has gone down significantly. It’s happening in the larger context of worries that a big spending bill increases inflationary pressures. The more you have the sense from Chair of the Federal Reserve Jerome Powell and others in Washington that inflationary pressures aren’t going away, the smaller the chances of a really big reconciliation bill and also the smaller the chances that this reconciliation bill gets there.”

To read more, view “What ‘Build Back Better’ 2.0 may mean for North Texas business owners, investors” from Dallas Business Journal. Please note a subscription is required to view the full article.

Ron KerridgeMeet Ron

Ronald D. Kerridge divides his time between transactional tax matters and tax controversies. On the transactional side, Ron’s practice emphasizes tax structuring of acquisitions and strategic partnerships. In his controversy practice, he represents clients before the IRS on a wide variety of federal income tax issues.

For related insights from Ron on recent tax proposals, read “Tax Planning for a Biden Presidency” and listen to the podcast “How the Proposed $2.1 Trillion Tax Hikes Could Impact U.S. Businesses and Taxpayers.”

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Ronald D. Kerridge
Partner, Dallas