28 October 2016 EY Center for Tax Policy: This Week in Tax Reform for October 28 Ways & Means Republican tax reform video: On October 25, House Ways and Means Committee Republicans released a video intended to highlight how the Blueprint on tax reform they released on June 24 "will deliver the bold, pro-growth tax reforms Americans need." Ways and Means Republican tax staff is in the process of receiving feedback and building out the tax reform Blueprint by drafting detailed statutory language, with the publicly expressed goal to have that effort completed by the end of 2016. The plan proposes a 20% statutory corporate tax rate, a 25% business tax rate for pass-through entities, a move toward a cash-flow consumption tax through immediate expensing for all businesses and elimination of deductibility of net interest expense, a territorial international tax system, a border tax adjustment mechanism, and elimination of most business preferences except the R&D tax credit and LIFO. For individuals, rates would be set at 12%, 25%, and 33%. Angus on Blueprint: At a D.C. Bar lunch October 25, Barbara Angus, the Ways and Means Committee's chief tax counsel, said that with regard to the Blueprint it is important "to keep this discussion going, to keep getting good feedback and having a good back and forth dialogue," Bloomberg BNA reported. The border tax adjustment element of the Blueprint would exempt exports from tax while taxing imports, placing the tax jurisdiction as the location of consumption rather than production. With regard to that issue, Angus said that she has had numerous discussions about supply chains on both sides that involve related and unrelated parties, according to the report. "Understanding those details for different industries is really important as we think about the mechanics," Angus said. Warren on corporate taxes: In a Huffington Post interview published October 23, Senator Elizabeth Warren (D-MA) continued to express opposition to reducing taxes for corporations ahead of expected attention on the issue next year. Warren, who has campaigned for Hillary Clinton, said the European Commission's State aid ruling involving Apple and actions taken by the G20 and OECD to combat tax avoidance undercut arguments that taxes must be reduced to keep corporations in the United States. "Instead of bailing out the tax dodgers under the guise of tax reform, Congress should seize this moment to repair our broken tax code," she said. Warren, repeating many of the same arguments she made in a September New York Times op-ed, suggested that corporations are undertaxed, especially at a time of high corporate profits. "These giant companies haven't just taken advantage of the tax breaks that have been offered to them, they haven't just lobbied for better and better tax breaks, they've laid out the whole narrative about how America should think about corporate taxes," she said. "The first priority to fix our broken tax code is to raise more revenue from big corporations." "Our global competitors continue to gain economic strength as American businesses move overseas, employers are cutting hours and freezing wages, and families are struggling to afford basic needs like health care. As a new year and a new Administration near, House Republicans are ready to work with a new President on the bold tax reform, strong trade agreements, and deregulation needed to get this economy moving again." — House Ways and Means Committee Chairman Kevin Brady (R-TX), statement on 3rd quarter GDP report October 28
Document ID: 2016-1835 | |||||
