Monthly LRA Update

LEGISLATIVE DEVELOPMENTS

Biden Administration Unveils Infrastructure Plan

On March 31, the Biden Administration released a fact sheet on what it calls “The American Jobs Plan.”  The plan identifies the following priorities:

• Fix highways, rebuild bridges, upgrade ports, airports and transit systems;
• Deliver clean drinking water, a renewed electric grid, and high-speed broadband to all Americans;
• Build, preserve, and retrofit more than two million homes and commercial buildings, modernize our nation’s schools and child care facilities, and upgrade veterans’ hospitals and federal buildings;
• Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers;
• Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future; and
• Create good-quality jobs that pay prevailing wages in safe and healthy workplaces while ensuring that workers have a free and fair choice to organize, join a union, and bargain collectively with their employers.

The bottom of the press release includes a tax plan that the Biden Administration separately identifies as the “Made in America Tax Plan” and purports to make sure corporations pay their fair share in taxes and encourage job creation at home.

Highlights of the tax plan include

• Set the Corporate Tax Rate at 28 percent;
• Enact a Minimum Tax on Large Corporations’ Book Income (i.e., a 15% minimum tax on GAAP income);
• Discourage offshoring by strengthening the Global Minimum Tax for U.S. Multinational Corporations;
• End the Race to the Bottom Around the World (i.e., encourage other countries to adopt strong minimum taxes on corporations);
• Prevent U.S. Corporations from inverting or claiming tax havens as their residence;
• Deny companies expense deductions for offshoring jobs and credit expenses for onshoring;
• Eliminate a loophole for Intellectual Property that encourages offshoring jobs and Invest in effective R&D Incentives; and
• Ramp up enforcement against corporations.

We will continue to monitor for more specific tax policy proposals, especially those related to the corporate tax rates, minimum tax provisions, and any other proposals related to expense deductions and tax preferences that could impact BOLI owners.

REGULATORY DEVELOPMENTS

Congressman Waters Urges Regulators Not to Weaken Big Bank Capital Requirements

On March 9, Congresswoman Waters sent a letter to the FRB, FDIC and OCC, encouraging them to maintain strong capital requirements and regulatory oversight of large banks. The letter asserts that the agencies took “extensive deregulatory actions” over the last few years and suggests that any other modifications to capital, leverage, or other prudential requirements should be evaluated in consultation with the FSOC and Treasury Secretary Yellen.In a separate development, the banking regulators announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020 would expire as scheduled on March 31.