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Dynamic Changes for Evaluating Budgetary Impact of Proposed Legislation

On January 6, the House adopted rules that require the Congressional Budget Office and the Joint Committee on Taxation to use macroeconomic or “dynamic” scoring in forecasting the budgetary impact of proposed legislation. Under this system, which is a change from the previous “static” scoring methodologies, calculating the forecasted fiscal impact of major legislation will...

FY 2016 Budget Tax Proposals Target Insurance Companies

On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S. corporations and their controlled foreign corporations (CFCs) and (ii) a one-time 14% tax on earnings accumulated in CFCs and not previously subject to U.S. tax....

Seven Bps or Just a Blip – Obama Proposes New Fee on Financial Institutions

On Saturday, January 17, 2015, President Obama released a Fact Sheet outlining a new plan to “to simplify our complex tax code for individuals, make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy.”  The fact sheet is sparse on details but is...

Senate Passes 2014 Tax Extenders, White House Opposition Unlikely

On December 16, in a vote of 76 to 16, the Senate passed the long-anticipated “extenders bill,” extending 55 tax provisions that expired at the end of 2013.  The bill had been passed by the House of Representatives on December 3, 2014 and now heads to the President’s desk where it is expected to be signed into law. As a one-year extension of tax provisions that expired on...

House Passes 2014 Tax Extenders, Senate Will Likely Follow Suit

In an overwhelming vote of 378 to 46, the House of Representatives passed a one-year extension on 55 tax provisions which expired at the end of 2013, so called “tax extenders.”  The tax extenders bill includes numerous popular business tax breaks, like the research credit (with a price tag of $7.6 billion according to the Joint Committee on Taxation), the new markets tax...

One Extenders Deal Put Off After Veto Threat, 2014 Extension Vote May Be Coming Soon

For a few hours last week, it appeared that there was a bipartisan agreement on expiring tax provisions, but shortly after press reports on the deal, the agreement fell apart under threat of a White House veto.  In a surprise to many, about 10 expiring tax provisions would have been made permanent under the agreement, including the research credit and expanded section 179 expensing. ...

Lew: Inversion Guidance Coming “Very, Very Soon,” Rather than Just in the “Very Near Future”

Anti-inversion guidance from Treasury is now a near-certainty, but when they arrive and how they will operate remains a mystery.  Treasury Secretary Jacob Lew used strong language to warn corporations against inverting in a September 17th interview with Bloomberg Television.  “Any company considering an inversion is now on notice that there is action that is going to be taken,”...

Senator Wyden Renews Push for Tax Extenders

The Congressional tax agenda for the end of 2014 is now clear: tax extenders and inversions.  Even as inversions dominate the news, Senate Finance Committee Chairman Ron Wyden (D-Ore.) is continuing his push to pass legislation which extends expired tax provisions.  On September 15, Senator Wyden issued a statement on the need to renew expired tax provisions, stating that the actions...

Schumer-Durbin Target Earnings Stripping

The change from summer to fall did nothing to alter the focus of the Congressional tax debate – inversions.  To that end, two Senators have introduced a new bill on “earnings stripping.” Senators Charles Schumer (D-NY) and Dick Durbin (D-Ill.) introduced new legislation on September 11 that would significantly limit earnings stripping by inverted companies.  The...

Representative Levin Targets Earnings Stripping

Inversion transactions are making waves, and politicians are taking notice, with the number of legislative proposals dealing with inversions and other international tax issues growing at a fast rate. Of particular note, Representative Sander Levin (D-Mich.), the ranking member of the House Ways and Means Committee, released a discussion draft of the Stop Corporate Earnings Stripping Act...

House Passes Bill to Make Bonus Depreciation Permanent

On July 11, 2014, the House of Representatives passed a bill to renew bonus depreciation and to make the provision permanent.  Bonus depreciation is one of several expired provisions that House Ways and Means Committee Chairman Dave Camp (R-Mich.) has made sought to make permanent. Bonus depreciation allows businesses to immediately deduct 50 percent of qualified purchased property and...

Repatriation Holiday in the Driver’s Seat?

Senator Harry Reid (D-Nev.) and Sen. Rand Paul (R.-Ky.) are in negotiations on a one-time repatriation “holiday,” which would allow U.S. corporations to repatriate foreign earnings at a special reduced rate.  No proposal has formally been released, but reports on the negotiations say that the rate would be between 5 percent and 9.5 percent.  The short-term revenue increase...

Internet Tax Freedom Act Extension Clears Congressional Committee

On June 18, the Judiciary Committee of the U.S. House of Representatives voted in favor of H.R. 3086, the Permanent Internet Tax Freedom Act (PITFA) by a vote of 30-4. PITFA permanently extends the moratorium on state and local taxation of Internet access and “multiple” or “discriminatory” taxes on electronic commerce. Background: The Internet Tax Freedom Act’s Expiration The...

Tax Extenders Debate is Extended — EXPIRE Act Stalls in the Senate

– Sen. Ron Wyden’s (D.-Ore.) EXPIRE Act, which would have revived several expired tax provisions (see prior post here), has been stalled in the Senate.  Despite broad bipartisan support for the EXPIRE Act, an apparent disagreement over amendments is preventing a vote on final passage. Senate Republicans proposed a number of amendments to the bill, including the repeal of the...

The Topsy Turvy Status of Inversions – Levins Move Forward, Wyden and Pfizer Move Back

Senator Carl Levin (D-Mich.) and 13 other Senate Democrats introduced legislation on May 20th that would significantly reduce the ability of U.S. companies to expatriate.  The Stop Corporate Inversions Act of 2014 would generally enact President Obama’s budget proposal targeting corporate inversions (see our prior post) by reducing from 80% to 50% the post-inversion ownership...

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