Will Tax Uncertainty Slow the Merger Frenzy?

Corporate partner Jim Birge and counsel Brent Mosby coauthored an article for the Indianapolis Business Journal titled “Will Tax Uncertainty Slow the Merger Frenzy?” that discusses whether a retroactive capital gains tax rate increase might slow the pace of M&A and examines whether the retroactive nature of the proposed tax rate increase is likely to survive a constitutional challenge.

Birge and Mosby highlight that the mergers and acquisitions (M&A) market has been on a torrent pace in 2021, partly driven by the widely held view that capital gains tax rates will be going up. The authors provide insight on recent tax proposals from the Biden administration and the House Ways and Means Committee and highlight the retroactive nature of both proposed tax increases.

The authors emphasize that higher capital gains tax rates are likely on the way – maybe as of September 13, almost certainly by January 1 – so it would be best for companies trying to get a deal done under the current tax regime to do so before December 31.

The full article is available for Indianapolis Business Journal subscribers.