05 February 2016 EY Center for Tax Policy: This Week in Tax Reform for February 5 Finance Committee hearings: The Senate Finance Committee will hold a series of hearings in relation to the Budget's release. — On Wednesday, February 10 (at 10:30 a.m.), the Committee will hold a hearing with Treasury Secretary Jack Lew as the witness. Ways and Means Committee hearings: The House Ways and Means Committee will hold a similar series of hearings. — On Thursday, February 11 (at 10:00 a.m.), the House Ways and Means Committee will hold a hearing on the Budget with Secretary Lew. Heritage event: On Monday, February 8 (at noon), the Heritage Foundation holds a discussion on "The Great Flat Tax Debate." TCPI symposium: Chairman Brady will be the Friday Keynote Speaker at the Tax Council Policy Institute's 17th Annual Tax Policy & Practice Symposium February 11-12, "Capital Matters: How Taxes Influence the Global Creation, Deployment, and Mobility of Capital." Brady on tax reform: House Ways and Means Committee Chairman Kevin Brady (R-TX) this week continued to lay out his tax policy plans for the year, saying during a Heritage Foundation speech February 1, "We are going to advance international tax reforms because that is an immediate threat to our economy today." Although there is no timeline for Committee action, the Chairman said Ways and Means would focus first on drafting a reform of how the overseas profits of US businesses are taxed because it seems like not a week goes by without news of a company moving their headquarters overseas. Brady said the Committee would build upon the work of former chairmen Paul Ryan (R-WI), now Speaker, and Dave Camp (R-MI), who he credited with bringing the issue to the table. On February 2, Brady met with Senate Finance Committee Chairman Orrin Hatch (R-UT), who suggested to reporters that both international tax reform and corporate integration must be examined. "If we can do both, it would be wonderful," Hatch said, according to Tax Notes. Tax Reform Task Force: In the speech, Chairman Brady said the Committee will advance reform highlighting the ideas of Republican presidential candidates as well as members of Congress, and not just determined by leadership. "We are going to listen to the ideas of our lawmakers, and the people that they represent," Chairman Brady said. "We are going to spotlight their ideas for the American public to see." On February 4, Speaker Ryan announced the formation of "six committee-led task forces charged with developing a bold, pro-growth agenda that will be presented to the country in the months ahead." Five focus areas of the agenda were announced last month, though since then the Jobs and Economic Growth focus has been split into separate task forces on Tax Reform and Reducing Regulatory Burdens. Speaker Ryan's announcement said the goal of the Tax Reform Task Force, headed by Brady, will be to "create jobs, grow the economy, and raise wages by reducing rates, removing special interest carve-outs, and making our broken tax code simpler and fairer." Economic growth hearing: The Ways and Means Committee's first hearing of 2016 on February 2, addressing economic growth and opportunity, largely focused on the benefits of international tax reform and the urgency of the issue given recent announcements of inversion transactions. The Heritage Foundation's Stephen Moore said, "If the United States does not take action in the next couple of years, more American companies will be lost to other countries," and agreed with Chairman Brady that tax reform should not aim for a 'middle-of-the-pack' corporate tax rate. Brady has previously said he would like to set the statutory corporate rate at under 20%. Tax Policy Subcommittee Chairman Charles Boustany (R-LA) noted pressure on US-based companies from the OECD BEPS project and European Commission State aid investigations, saying that international tax reform must be done with a sense of urgency or the nation will continue to lose major US-headquartered companies along the lines of the inversion transactions announced recently. Several Democratic members expressed concern about any tax changes that would increase the deficit in light of the year-end legislation that made permanent a number of tax extenders provisions without offsetting the cost. President's transportation proposal: President Obama's FY 2017 Budget to be released on Tuesday will include a transportation plan that "continues the President's call to use the one-time revenues from pro-growth business tax reform to fund a temporary near-term surge in investment," while proposing a new $10 per barrel fee on oil paid by oil companies to pay for long-term investments, the White House said. "The fee raises the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have," according to a fact sheet released on February 4. "By placing a fee on oil, the President's plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future." The President's 21st Century Clean Transportation Plan would make investments in areas such as mass transit systems and accelerating the safe integration of autonomous vehicles, low-carbon technologies, and intelligent transportation systems. The new oil fee has already drawn objections from Republicans in Congress, including Speaker Ryan, who said, "As this lame-duck president knows, it's dead on arrival in Congress, because House Republicans are committed to affordable American energy and a strong U.S. economy." "Ways and Means Committee members are going to move forward to advance a tax code that's built for growth. We are committed to seizing any opportunity to accomplish exactly that." — House Ways and Means Committee Chairman Kevin Brady (R-TX), February 1
Document ID: 2016-0266 | |||
