|After the UK Brexit referendum of 23 June the implications on the political, economic and legal relations between the UK and the EU have been discussed from many angles. But what about...|
Congress Takes First Steps Toward Tax Reform
The House of Representatives formally began the process by approving legislation that establishes broad parameters for the substance of tax reform and adopts an expedited process for Congressional consideration of tax reform legislation.
Under the House bill, the tax reform legislation must have these key elements:
- Reduction in corporate tax rate and top individual tax rate to 25 percent;
- Repeal of the alternative minimum tax
- Repeal of current tax preferences to provide tax revenue at 18-19 percent of “the economy” (i.e., Gross Domestic Product);
- Change from a “worldwide” to a “territorial” tax system for overseas operations.
In addition, the House bill calls for introduction of tax reform legislation by April 30 of next year that meets these parameters, with House Ways and Means Committee to act on the tax reform measure within 20 days. After expedited House Floor consideration, the Senate Finance Committee would have to act within 15 days on the tax reform legislation. Senate Floor debate on each amendment would be time-limited. The tax reform bill could be subject to a 60-vote threshold before moving to final passage in the Senate.
On the Senate side, the Finance Committee took what some Members characterized as a first step toward tax reform by culling through the lengthy list of expiring tax incentive provisions known as “tax extenders” which historically have been renewed each year “en masse”, dropping some 20 current law tax incentives from the renewal package.
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