Posted by Jon Goldman on Mar 11, 2014
The Obama Administration has corporate “inversions” in its sights. On March 4, the Administration’s 2015 budget was released, and it includes a provision which would significantly lower the ownership thresholds to keep “inverted” companies within the U.S. taxing power.
The budget would make changes to section 7874, which was enacted in 2003 and targets “inversion transactions.” Under current law, an inversion transaction generally involves the acquisition by a foreign corporation of substantially all of the properties of a domestic corporation, if the shareholders of the...
Posted by Jonathan Goldman on Mar 5, 2014
On February 26, Representative Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, released his much-awaited comprehensive tax reform plan (the “Camp Proposal”). That proposal seeks to cut marginal tax rates on individuals and corporations by dramatically reducing the number of available deductions and credits, and proposes significant other changes to the tax code that would affect taxpayers across tax brackets and industries.
Many view this proposal as the most comprehensive tax reform plan released by a member of Congress since 1986, and its breadth is hard to...
Posted by Jonathan Goldman on Mar 5, 2014
On March 4, the President released the 2015 annual budget, which included both old and new tax proposals. We will be posting further on some of these proposals, and the Administration’s entire explanation of the revenue proposals, aka the Greenbook, can be found here.
Posted by William Pauls on Mar 5, 2014
On February 26, House Ways and Means Committee Chairman Dave Camp (R-Mich.) released a “Discussion Draft” of the Tax Reform Act of 2014, which sets forth his much-anticipated tax reform proposals. Of note, the Discussion Draft aims to transition the corporate tax rate to a flat 25% rate beginning in 2019 and to repeal the corporate alternative minimum tax. However, as part of the revenue raisers for these proposed changes, the Discussion Draft includes a number of proposals that target insurance companies or that otherwise would have a direct effect on them. In particular, those...
Posted by Jonathan Goldman on Mar 2, 2014
Representative Dave Camp (R-Mich.) has released a comprehensive tax reform plan. Links to key materials are included here.
The legislative text
The section-by-section summary
The executive summary
The press release
The Joint Committee on Taxation...
Posted by Jonathan Goldman on Feb 25, 2014
Even as the prospects for comprehensive tax reform dim, House Ways and Means Chairman Dave Camp (R-Mich.) and President Obama are pushing forward with proposals to change the tax code.
Rep. Camp has said that he is going to release a comprehensive tax reform plan, a move that House GOP leadership has thwarted in the past. The Chairman’s plan could be released as early as the week of February 24th. While his past discussion drafts give some idea of what will be in Rep. Camp’s plan, he has not yet provided any details.
President Obama is also reportedly targeting the offshore profits of...
Posted by Troy Olsen on Feb 18, 2014
The OECD’s Base Erosion and Profit Shifting (BEPS) project continues apace, and information on the direction of the project is getting out. On February 10, Tax Analysts’ Lee Sheppard reported on a leaked draft report dealing with hybrid entities (entities which are treated as separate entities in one jurisdiction but are disregarded as separate entities or treated as pass-through entities in another jurisdiction).
Sheppard reports that the OECD’s leaked draft (dated October 2013) recommends the implementation of “action 2” of the BEPS action plan (released in July 2013), which...
Posted by Jessica Englert on Feb 12, 2014
No one can accuse Ron Wyden (D-Ore.) of lacking creative metaphors. The new Senate Finance Committee Chairman described the Internal Revenue Code as a “dysfunctional, rotting mess of a carcass,” while discussing his tax reform agenda on February 7 at the Conference on Growing Income Inequality in Los Angeles. Sen. Wyden stressed his desire for a tax code “where everybody has a chance to get ahead.” Sen. Wyden outlined some of his tax reform goals:
Implement targeted tax breaks and increase the standard individual deduction to spur lagging middle class spending;
Posted by Tory O'Connor on Feb 11, 2014
Optimism is still the name of the game for the staff of Representative Dave Camp (R-Mich.). Ray Beeman, majority tax counsel of the House Ways and Means Committee, says that reactions to Rep. Camp’s 2011 international tax reform discussion draft provided a clear sense of where the disagreements lie. When asked, Rep. Camp indicated he felt confident about making progress on reform in 2014, and according to Beeman, House Republicans are interested in pushing tax reform this year: “there’s strong interest in doing tax reform this year, if possible, so I do think we have some wind at...
Posted by Jon Goldman on Jan 30, 2014
In Tuesday’s State of the Union, President Obama renewed his call for business tax reform, but the issue only merited four sentences in the approximately hour-long address. The President said:
“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs here at home....
Posted by Jessica Englert on Jan 29, 2014
Apparently, the reporting requirements of foreign financial institutions have now become partisan red meat. On Friday, the Republican National Committee made repeal of the Foreign Account Tax Compliance Act (FATCA) part of its party platform.
A resolution passed by voice vote at the RNC’s annual winter meeting in Washington, D.C., establishing a party position on the anti-tax-evasion law before the midterm elections. The resolution stated that it “urges the U.S. Congress to repeal FATCA, to defend the livelihood and increase the competitiveness of Americans overseas, to remove...
Posted by Rich Sun on Jan 27, 2014
With comprehensive tax reform stalling in Congress, some are suggesting the Administration may take tax matters into its own hands.
On January 21, Heather Zichal, President Barack Obama’s former top energy and climate aide, said that the Obama administration is considering using existing executive authority to make changes to tax policies with respect to renewable energy development. A number of changes are currently considered, including a revenue ruling to allow real estate investment trusts (REITs) to invest in renewable energy. REITs, which are subject to special tax treatment,...
Posted by Troy Olsen on Jan 16, 2014
After the tax reform “Road Show” this summer failed to gin up enough momentum for tax reform (see our prior post), Representative Dave Camp (R-Mich.) is taking the case to a new venue – YouTube. On January 15, the House Ways and Means Committee Chairman released a short “Tax Education Video.” With rather smooth graphics and high production value (and without any member of the unpopular Congress appearing), the video makes the case that the Tax Code is full of “confusion, complexity and cost.”
While Rep. Camp has previously proposed reducing the corporate income tax rate to...
Posted by Mikka Gee Conway on Jan 15, 2014
The end of 2013 saw the expiration of more than 50 temporary tax cuts, including the research and development credit, various renewable energy credits, provisions allowing accelerated depreciation of certain business assets, and certain international tax provisions. In past years Congress has allowed these provisions to lapse, only to retroactively renew them for limited periods through “tax extenders” legislation. Late in 2013 Rep. Dave Camp (R-Mich.) indicated that individual consideration of the expiring tax provisions would be part of a comprehensive approach to tax reform, even...
Posted by Jonathan Maddison on Jan 9, 2014
Senator Ron Wyden (D-Ore.) is likely to become busier in 2014, as his ascension to Chair of the Senate Finance Committee is all but confirmed. In recent days, speculation has shifted from if Sen. Wyden will be appointed to what will be accomplished when he is appointed. The role of Chair will become vacant upon Sen. Max Baucus’s (D-Mont.) confirmation as Ambassador to China (see our earlier post). Coupling Sen. Baucus’s departure with the impending retirement of Sen. John D. Rockefeller IV (D-W.Va.)—the most senior Democrat on the Committee after Sen. Baucus—Sen. Wyden’s is the...