This issue of Washington Tax Insight focuses on the budget issues and the draft tax reform proposals that are circulating on Capitol Hill. It has been prepared by True Partners Consulting, in conjunction with the Tax Policy firm of Beckham Advisors, LLC. Please let us know of any matters you would like to see addressed in future issues.
The Republican-controlled Congress has achieved success in the first big test of this year with approval of a Budget Resolution for Fiscal Year 2016. The work on appropriations legislation to establish spending priorities and budget reconciliation legislation which would incorporate tax and spending changes now begins in earnest. Although budget issues will continue to dominate the Congressional agenda for the rest of this year, the two tax-writing committees have ambitious agendas in the tax area.
The Senate Finance Committee continues to work to lay the groundwork for comprehensive tax reform proposals which are expected sometime this summer after the Working Groups complete their deliberations. The Ways & Means Committee continues to work behind the scenes on specific areas such as the international tax rules, while also advancing certain miscellaneous tax and trade issues, either because they demand attention (e.g., the highway bill) or because they advance certain principles of the Republican agenda this year (e.g., repeal of the estate tax).
Former W&M Committee Chair Camp, who retired at the end of 2014, started work on comprehensive tax reform in 2011. This work culminated in a Discussion Draft released in February 2014 after months of Committee hearings and meetings. The draft included a reduction in the corporate and individual tax rates to 25% and a move toward a territorial system for taxing domestic multinational corporations as well as a number of base-broadening provisions that would have had a major impact on corporations, pass-through entities, individuals, and tax-exempt organizations.
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Robert M. Gordon, Managing Director