Eversheds Sutherland Tax Reform Law Blog
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Senator Hatch Weighing Corporate Integration System; Former Treasury Officials Testify in Favor

The staff of Senator Hatch, Chairman of the Senate Finance Committee, is reportedly investigating a proposal that will permit a corporation to deduct 40% of the dividends it pays to shareholders.  Senator Hatch has previously promoted similar corporate integration measures—plans that eliminate or reduce the double taxation corporations face.  The proposal is reportedly being explored as an alternative to eliminating interest deductibility, as proposed by the House Republican’s Blueprint.  Interest deductibility is argued to favor debt over equity financing.  Senator Hatch’s plan would...
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Ways and Means Committee Hears Testimony on Simplifying the Broken Tax Code

On Wednesday July 19th, the House Ways and Means Tax Policy Subcommittee, led by Subcommittee Chairman Peter Roskam, held a hearing on tax reform, titled “How Tax Reform Will Simplify Our Broken Tax Code and Help Individual Families.”  The hearing focused on individual tax reform.   Subcommittee Chairman Roskam, in his opening statement, touted the introduction of a postcard-sized  individual tax return which eliminates all but two deductions and significantly reduces the number of tax brackets.  The prepared Opening Statement is available here. The witnesses offering testimony before the...
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Republicans Close to a Unified Tax Reform Framework

House Speaker Paul Ryan, addressing an audience at the New Balance shoe factory in Massachusetts, stated that White House and Congressional leaders are nearing agreement on a tax reform framework.  Speaker Ryan suggested that lowering the current corporate tax rate of 35 percent to a 20 percent rate, through the closing of loopholes and special interest deductions, is a realistic goal.  He did not mention the border adjustment tax as a means to pay for lower corporate tax rates, which may indicate that the House GOP is conceding the controversial proposal. Ryan says us tax reform consensus...
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House Committee Approves 2018 Budget Resolution

The House Budget Committee, with members voting along party lines, voted to send the recently introduced budget resolution to the House floor for consideration by the full chamber.  Opposition is anticipated not only from Democratic members, but also from within the GOP rank and file, with Republican moderates disagreeing with the proposed steep cuts and Republican conservatives arguing that the cuts are not large enough.  Both the House and the Senate must approve the measure to access the reconciliation process, which would allow the passage of tax reform in the Senate by majority vote. ...
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White House Reconsidering Corporate Tax Rate Goal

The Trump Administration, according to White House officials and advisors, is considering a corporate tax rate of 20 percent to 25 percent.  While this estimate is higher than the 15 percent rate set forth in the Administration’s one-page tax proposal issued in April, one senior administration official explained that the April figure was a starting point for negotiations, with the ultimate goal of a corporate tax rate near 20 percent.   President Trump is expected to begin campaigning in support of a unified Republican tax reform plan next month, which White House and Congressional leaders,...
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House Republicans Disclose Budget Plan

The House GOP has unveiled its budget plan, calling for extensive cuts in federal spending, including federal employee benefits, financial industry regulations and welfare expenditures, that total over $200B.  Along with anticipated accelerated economic growth, these cuts are intended to produce a balanced budget over the next decade.  While divisions among the House Republicans make it difficult to predict if the budget can survive a floor vote, White House budget director Mick Mulvaney has strongly endorsed the blueprint, stating that “… this budget lays a pathway for Congress to pass and...
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House Ways and Means Committee Plans to Permit Interest Deductions for Small Businesses

Rep. Peter Roskam, the Chairman of the Subcommittee on Tax Policy for the House Ways and Means Committee, has commented that they are “actively working” to exempt small businesses from the provision contemplated by the House Republican Blueprint that would deny deductions for net interest expense.  The Chairman noted that they are sensitive to those who have no access to capital except through borrowing, such as farmers, and that the tax code should ensure those businesses maintain their ability to borrow. With respect to the proposed 25% tax rate for pass-through businesses, the Chairman...
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Strategists Predict Regardless of Healthcare Reform’s Outcome, Tax Reform will Happen

Political strategists predict a tax reform bill will be signed into law next year, regardless of the outcome of efforts to enact a healthcare bill.  Their expectations are for smaller corporate and individual tax cuts than initially hoped, with a new corporate tax rate around 23 percent and individual cuts focused on the lower and middle class taxpayers.  However, tax reform efforts could be delayed as Congress directs its attention toward the looming budget resolution and debt ceiling issues. Tax reform and tax cuts are coming even if health-care bill fails — political...
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Roskam Announces Fourth House Ways and Means Committee Hearing on Tax Reform

Peter Roskam, Chairman of the House Ways and Means Tax Policy Subcommittee, has announced that the Committee will hold its fourth hearing on tax reform, titled “How Tax Reform will Simplify our Broken Tax Code and Help Individual Families,” on July 19th at 2:00 pm.  The hearing will focus on simplifying the tax code, reducing the burden on American families and individuals, and delivering economic growth. Roskam Announces Tax Policy Subcommittee Hearing on How Tax Reform Will Simplify Our Broken Tax Code and Help Individuals and...
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Senate Finance Committee Announces Tax Reform Hearing

The Senate Finance Committee, led by Chairman Orrin Hatch, will convene a tax reform hearing on July 18 at 9:00 am titled “Comprehensive Tax Reform: Prospects and Challenges.”   The hearing, featuring testimony from four former Treasury Assistant Secretaries for Tax Policy, will examine the challenges faced by Congress in enacting tax reform to promote economic growth and job creation. Hatch Announces Hearing on Prospects, Challenges of Comprehensive Tax...
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Global Minimum Tax Under Consideration for Tax Reform

The Senate is reportedly exploring the possibility of a global minimum tax, an idea which has historically had some bipartisan support. One approach being considered is a version of the ‎provision that was included in the 2014 tax reform legislation proposed by Dave Camp, the former chairman of the House Ways and Means Committee. That proposal, which generally had the effect of a global minimum tax, applied a 15% tax on foreign intangible income if ultimately derived from consumption outside of the US and 25% if derived from the US. The tax would not apply if the local jurisdiction taxed the...
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Legislative Affairs Chief Predicts Unified Tax Plan in July

White House legislative affairs chief Marc Short has stated that the Trump Administration intends to have a unified tax reform plan in place prior to Congress’ August recess, accelerating Treasury Secretary Steven Mnuchin’s previously stated target of early September. White House spokesperson Natalie Strom confirmed the July goal, adding that the unified proposal will be used to ready legislation during the recess to initiate the legislative process after the hiatus. Read more: Timeline for Trump’s Tax Plan Gets New End-of-July...
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Tax Reform Hearing Addressing Benefits for Small Businesses and Job Creation set for July 13

Peter Roskam, Chairman of the House Ways and Means Tax Policy Subcommittee, has announced that the next hearing on tax reform will be held on July 13th at 10:00 AM.  The hearing will focus on how tax reform will benefit small businesses and help them create jobs, featuring testimony from small business owners. Roskam Announces Tax Policy Subcommittee Hearing on How Tax Reform Will Help America’s Small Businesses Grow and Create New...
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Cohn Optimistic for Tax Reform Regardless of Health Bill Progress

Gary Cohn, the White House chief economic advisor, is confident that tax reform will occur in September regardless of any healthcare reform bill progress, stating that the Trump Administration will be 100% engaged in tax reform after the August recess.  Cohn also defended the administration’s goal of 3% gross domestic product growth, calling it “very realistic.” Tax reform is coming in September, Trump economic advisor Gary Cohn...
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House Freedom Caucus and Tuesday Group at Odds Over 2018 Budget Resolution

Amidst debate surrounding major spending cuts to the budget, the House Budget Committee canceled recent plans to send a budget resolution for fiscal year 2018, a prerequisite to passing tax reform in the Senate without support of Democrats, to the House floor.   The conservative Freedom Caucus will only support a budget resolution if it includes cuts to welfare programs such as Medicaid and food stamps.  The moderate House Tuesday Group opposes such cuts, leery of a reduction in benefits to the poor while corporate America and the wealthy profit from cuts.  Each group holds enough votes to...
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