Here are just a few of the potential changes that business leaders should prepare for in the coming months.
President Joe Biden’s administration kicked off with the American Rescue Plan Act of 2021, the $1.9 trillion economic stimulus bill that included a slew of resolutions focused on pandemic recovery.
“When you have large spending packages, the next conversation is: How do we pay for it?” says Elizabeth Taylor, Executive Vice President, Head of Government Affairs and Economic Development at Regions Bank.
Taylor predicts that to mitigate some of the upward of $5.3 trillion spent on pandemic response by both the Trump and Biden administrations, corporate tax rates could increase to 28% and the capital gains rate may be eliminated. “Some business owners are concerned about how an increased tax rate could affect the sale of their business or part of their business,” she notes.
Of course, a new administration’s impact extends far beyond taxes.
Focus on Health and Safety
The pandemic’s impact on worker health and safety will persist. Although Occupational Safety and Health Administration guidelines may be less restrictive a year from now, regulations around how businesses protect their employees and customers may apply to both on-site safety and sick leave. Daniel Grattan, Senior Vice President, Federal Government Affairs, notes that the American Rescue Plan Act extends the payroll tax credit to support for time off for emergency paid family leave through September 30, 2021, adding that companies can claim a credit of up to $12,000 per worker for paid leave benefits.
Employers planning for 2021–22 should remember that the stimulus bill held some temporary healthcare benefits and extensions, which may signal long-term changes to national healthcare policy.
Infrastructure Potential
Grattan and Taylor note that this administration’s infrastructure agenda may offer increased opportunity. “It may encourage utilizing materials that are sourced from American manufacturers,” explains Grattan. “If you are a manufacturer in the United States right now, you may see some production increase over the next two to four years as the infrastructure plans take shape.”
“I think that it's really more widespread than people anticipate,” says Taylor about the plan, which will likely be enacted late this summer and include broadband internet, water systems, electrical grids, and transportation.
To learn more about how changes in Washington, D.C., may affect your business, listen to “The Business Impact of a New Political Landscape” from our podcast Commercial Insights with Regions Bank.
