20220331-KPMG_Global-United_States_–_The_Green_Book_Treasury_s_Budget_Proposals_for_FY23_4页_295kb

Summary of U.S. Treasury's Green Book for FY23 Budget Proposals

This document addresses the United States Treasury Department's March 31, 2022 release of the "Green Book," outlining fiscal year 2023 budget proposals, with a focus on individual income tax changes potentially affecting global mobility programs.

Key Points

• The Green Book contains the administration's tax priorities and provides details that may influence future legislative actions.
• Proposed changes could significantly impact global-mobility programs and international assignees if enacted.

Individual Income Tax Proposals (Effective for Taxable Years Starting After Dec 31, 2022)

• Increase top income tax rate from 37% to 39.6% for specific income brackets.
• Tax long-term capital gains and qualified dividends at ordinary rates for high-income earners with taxable income above $1,000,000 (indexed).
• Treat asset transfers by gift or death as realization events for capital gains.
• Impose a 20% minimum tax on total income for individuals with wealth exceeding $100 million.
• Classify carried interest as ordinary income for partners with income over $400,000.
• Eliminate tax deferral for section 1031 like-kind exchanges for gains exceeding $500,000 ($1,000,000 for joint filers).
• Require 100% recapture of depreciation deductions for certain real property owners.
• Simplify foreign currency gain calculations and increase the deductible amount for mortgage debt losses.
• Extend the exclusion for student debt relief payments.
• Raising the foreign tax credit limitation threshold from $300 to $600 ($1,200 for joint filers).
• Mandate reporting for foreign digital asset accounts.
• Require withholding on failed non-qualified deferred compensation plans.
• Extend the tax assessment period to three years post-Form 8854 filing.

Omitted Proposals

• Not included are measures like implementing a minimum billionaire tax, allowing banks to share information with the IRS, expanding the SALT deduction, and enhancing social safety nets.

The Green Book draws from previous proposals and the Build Back Better Act, though some were blocked in the Senate. This summary is for informational purposes only and not formal tax advice.