22 July 2016 EY Center for Tax Policy: This Week in Tax Reform for July 22 This Week in Tax Reform will not be published the week of July 25. Tax Alerts will be distributed as events warrant. Trump advisers plan revisions: Advisers have begun to outline potential revisions to trim the $10 trillion revenue cost of the tax plan Republican presidential nominee Donald Trump proposed in September 2015. During a July 20 Politico event in Cleveland in conjunction with the Republican National Convention, Stephen Moore of The Heritage Foundation and CNBC's Larry Kudlow suggested that the revised plan has not been finalized but could cost one-third of the original plan, or about $3 trillion. Moore said the top individual rate could be set as high as 33%, the same as proposed under the House Republican Blueprint on tax reform released June 24, and that there could be about a 75% overlap between the two plans. "We just tweaked this thing and the goal was to put in more growth and bring the deficit way down, which we have achieved," Kudlow said, as reported by The Wall Street Journal. "And there's some tough decisions with respect to deductions." The advisers did not say when the revised plan would be released. Convention platform: Meanwhile, the Republican platform adopted on July 18 proposed tax changes that include a corporate rate reduction and a switch to a territorial system of taxing foreign earnings of US-based companies. "We believe American companies should be headquartered in America. We should reduce barriers to accomplishing that goal," the platform stated. More generally, the platform said, "We will not divide the American people into winners and losers. We will eliminate as many special interest provisions and loopholes as possible and curb corporate welfare, especially where their erosion of the tax base has created pressure for higher rates." The platform also expressed concern about the potential for "hyper-taxation" in the context of tax reform, and requires that "any value added tax or national sales tax must be tied to the simultaneous repeal of the Sixteenth Amendment, which established the federal income tax." Wyden tax staff announcement: On July 20, Senate Finance Committee Ranking Member Ron Wyden (D-OR) announced that Victor Fleischer and Tiffany Smith will serve as co-Chief Tax Counsel for Committee Democrats, following Todd Metcalf's departure. Fleischer, a Professor of Law at the University of San Diego slated to start at the Finance Committee on October 11, is well known for a 2008 paper recommending treatment of carried interest distributions as ordinary income. He testified before a 2011 joint hearing of the Senate Finance Committee and House Ways and Means Committee on debt-equity tax issues and discussed eliminating the deduction of interest by financial institutions to the extent the debt/equity ratio of the institution exceeds 5 to 1. Fleischer has also penned the New York Times "Standard Deduction" column. "One of the reasons I'm excited for the job is that Senator Wyden's interest in simplifying the code, ending the gamesmanship, and reforming the international tax system to make it more friendly for U.S. job creation — those are principles that any tax professor would get behind," Fleischer told Tax Notes July 20. "For a tax nerd, it's a dream job." Smith was Senior Tax Counsel for the Democratic side of the Committee, a position she also held under former Senator Max Baucus (D-MT), and has overseen legislative efforts pertaining to international and corporate tax, tax-exempt organizations and estate and gift taxes. Brady tax reform op-ed: In a July 19 op-ed on CNBC.com, Ways and Means Committee Chairman Kevin Brady (R-TX) touted the House Republican tax reform Blueprint's effort to "boost investment by allowing all American businesses to fully and immediately write off purchases of new machinery or technology needed to produce and compete at a higher level." He also discussed replacing the international tax system "with one designed to make the United States the most attractive place in the world to headquarter a business," and reducing the corporate income tax rate. Chairman Brady further said the plan includes "innovative measures to level the playing field for American-made goods and services." JCT description of President's Budget proposals: On July 21, the staff of the Joint Committee on Taxation provided its annual description and analysis of the revenue proposals included in the President's fiscal year 2017 budget proposals, as submitted to the Congress on February 9 (JCS-2-16). The Joint Committee staff had previously produced estimated budget effects of these proposals in JCX-15-16. "So, with Donald Trump in the White House Senate Republicans will build on the work we've done and pass more bills into law than any Senate in years … So, my friends, keep the Senate in Republican hands and we'll continue this work and the remarkable public servants that I'm proud to lead in the Senate will not let you down." — Senate Majority Leader Mitch McConnell (R-KY), July 19 speech to the 2016 Republican National Convention
Document ID: 2016-1277 | |||||||||||||||
