Policy/Legislation
White House May Make Capital Gains Increase Retroactive: The New York Post reports the White House will not rule out a retroactive implementation of its sweeping new tax plan. Previously, the Biden administration has said levying taxes retroactively — which could “stick taxpayers with jacked-up rates” on transactions dating back to January 1 instead of imposing them beginning next year — isn’t its “first choice” as it pushes a bold series of hikes on companies and the wealthy. However, the White House has refused to rule out the rare, but not unprecedented, move.
Democrats Mull Weakening Biden Tax on Capital Gains for Estates: Bloomberg reports the Biden administration's proposal to dramatically expand the inheritance tax is apparently experiencing headwinds. Many Democrats on Capitol Hill appear nervous about the scope and size of elements of the White House's ambitious tax plans and the reality of their narrow House and Senate majorities. Staff for House Ways and Means Chair Richard Neal have floated the idea of allowing beneficiaries to defer the tax bill as long as they retain the inherited asset, rather than subjecting heirs to a hefty tax payment at the time of the death of their benefactor.
Study Warns Tax Hikes Would Destroy Jobs: Tax hikes proposed by President Biden under consideration by Congress -- even with a 25 percent corporate income rate instead of the 28 percent sought by Biden -- would cost the U.S. an average of half a million jobs per year over the next decade, according to a study conducted for the National Association of Manufacturers by Rice University economists John Diamond and George Zodrow. The study looked at the combined impact of the 25 percent corporate rate and Biden's proposals to increase the top individual rate used by so-called pass-through businesses to 39.6 percent, reinstate the corporate alternative minimum tax, increase the capital gains tax rate to 43.4 percent for millionaires and tax unrealized capital gains at death.
Regulation
FSI sues to stop withdrawal of DOL independent contractor rule: Investment News reports the Financial Services Institute is suing the Department of Labor to prevent the agency from withdrawing a Trump administration regulation. The trade association says that the regulation would benefit independent brokers and financial advisers. FSI joined three other groups in filing a complaint against the DOL in a federal court in Texas. The plaintiffs charged that the agency acted arbitrarily and violated federal regulatory rules by killing the regulation, which would have clarified the tests used under the Fair Labor Standards Act to determine whether a worker is an independent contractor or an employee. The PRO Act, which ADISA opposes, would further decrease the number of indepedent contractors across the nation, reclassifying many workers as emplyees. It passed the House in March but so far has not moved in the Senate. As a result, President Biden included the PRO Act in his $2.3 trillion infrastructure package.
SEC's Crenshaw Wants Investor Testing on Reg BI, Form CRS: The SEC needs to conduct investor testing on Regulation Best Interest as well as its Customer Relationship Summary, or Form CRS, to ensure the disclosure-based rules are working, SEC Commissioner Caroline Crenshaw said last week, reports ThinkAdvisor. Crenshaw said whether disclosure “truly enables informed decision-making is a crucial question in terms of the effectiveness of our regulatory approach,” adding that the agency needs to “engage in investor testing of the actual forms and disclosures that investors receive in order to determine whether or not they are effective.”
SEC chair planning new disclosures for public companies: Reuters reports the SEC plans to propose a rule requiring that public companies disclose a range of workforce data as the agency steps up environmental, social and governance (ESG) disclosures, Chairman Gary Gensler said, stating that "investors increasingly want to understand information about…one of the most critical components of companies, their workforce.”
FINRA using AWS tools for regulatory search: WatersTechnology reports FINRA has added tools from Amazon Web Services to tap natural-language processing to search regulatory filings and reports. FINRA says its goal is to build "regulatory connected intelligence by leveraging artificial intelligence and machine learning."
