It's the beginning of 2014, and Congress did not pass legislation to extend the "tax extenders," a collection of over 50 provisions that expired at the end of 2013. Although they might later be extended retroactively, that means that a motley collection of tax breaks for research and spending by small businesses, along with specialized breaks for Puerto Rican rum, NASCAR tracks, racehorses, and movie studios have vanished, at least for now.
Senate Democratic leadership is reportedly considering a last minute effort to extend 55 expiring tax provisions for another year, including a large number of so-called “tax extenders” as well as the supposedly-temporary bonus depreciation. This package could cost $40 to $50 billion and includes no offsets.
This week, Senate Finance Chairman Max Baucus (D-MT) has been moving forward with tax reform, releasing three discussion drafts. On Tuesday, he released a draft of international tax reform intended to make the U.S. more competitive with other developed countries. On Wednesday, he released a draft on tax administration, intended to fight fraud and simplify the filing process.
This week, Senate Finance Chairman Max Baucus (D-MT) is moving forward with tax reform, releasing three discussion drafts. Yesterday, he released a draft of international tax reform intended to make the U.S. more competitive with other developed countries. Today, he released a draft on tax administration, intended to improve the way taxes are collected and make it easier for taxpayers to file. Tomorrow, he will release a draft changing how businesses claim costs from their expenses.
This week, Senate Finance Committee Chairman Max Baucus (D-MT) is moving ahead with tax reform, starting with the release of discussion drafts on reforming the international tax system, tax administation, and cost recovery. Today, Baucus released the draft on international taxes.
The year is rapidly coming to a close, with only 11 days left that the House plans to be in session. Before the year's end, Congress is supposed to hear from the budget conference committee on the results of their negotiations, but lawmakers also have a few other year-end events to handle.
What to do about sequestration remains one of the most important questions before the budget conference, and while replacing at least part of the sequester is popular among lawmakers, it is not clear what policies should offset that cost. Today, Nicole Woo of the Center for Economic and Policy Research (CEPR) made the case for an offset that could replace one-third of the sequester for 2014 - increasing Wall Street user fees.
Citizens for Tax Justice has released a new tax reform plan which eliminates some tax breaks and uses some of the revenue to cut the top rate and simplify some tax provisions. In total, they estimate the package would raise $2.4 trillion in revenue over the next ten years, or $2 trillion in permanent revenue when temporary effects of a few policies (like accelerated depreciation) are excluded.
On this day 27 years ago, President Ronald Reagan signed into the law the Tax Reform Act of 1986, which stands as the last major overhaul of the US tax system. The law serves as the ultimate example in this country of tax base-broadening and tax rate-lowering reform and is often cited as the inspiration for many tax reform plans today. The Act consolidated individual income tax brackets from 15 to 2, reducing the top individual rate from 50 to 28 percent and the top corporate rate from 46 to 34 percent.