Daily Tax Update - February 16, 2005

Tax Reform Panel Convenes
Today, Treasury Secretary John Snow and other tax experts testified before the President's Advisory Panel on Tax Reform. At today’s hearing, Treasury Secretary Snow said, "The President is committed to major tax reform, to real tax reform, to something more than just moving the boxes around." Snow also said, "While America remains known for its economic flexibility and dynamism, our tax code has grown larger, bulkier, more burdensome and lethargic with every passing year. The tax code is dreadfully murky in its complexity, but its size is clear and easy to see. More than a million words long, the Internal Revenue Code and regulations has more than doubled in terms of page-length over the past twenty years and today's ‘short’ income tax form takes more than 11 hours to prepare - about the same as the ‘long form’ did a decade ago. The code is so filled with loopholes, exceptions and lengthy explanations that individuals and businesses spend more than six billion hours every year on paperwork and other tax headaches." Snow continued, "Imagine what this great country could do if we could get a few billion hours back. And that's why we're here today. To talk about how we can take those billions of hours away from the tax code nightmare and give them back to the terrific productivity and creativity of the American people. The President has asked that this bipartisan Panel work together to come up with some options. He has asked that you be guided by the goals of increased fairness, simplicity and ease of understanding, and economic growth and job creation. The President has also asserted that a new code should carry on the good traditions of recognizing the importance of homeownership and charity in our society." Snow added, "I look forward to reviewing your proposals - which the President has asked to be revenue neutral - later on this year. Tax reform is a key priority for the President, and for the American people."

  • The panel’s Chairman, former Senator Connie Mack said, "The President has stated clearly that tax reform is a key priority and formed this Panel to advise the Secretary of the Treasury on options to reform the tax code.  We have been directed to provide the Secretary our findings by July 31.  To accomplish this task, we intend to do our work in two stages.  First, we will take a comprehensive look at the existing tax system.  Our objective is to make sure that we have a full understanding of the current problems in the tax code - specifically its complexity, its impact on economic growth, and its perceived unfairness.  After we have defined the problems that need to be addressed, we will turn to a consideration of options for reform.  These options may include making modifications to improve current law, overhauling the existing system, or replacing the current structure and starting over.  As part of our effort, we will study the major reform proposals that have been offered in the past, as well as any new ideas.
  • The tax reform panel’s website can be accessed here
Tax Bills Introduced February 15
  • H.R. 807 sponsored by Rep. Earl Blumenauer (D-OR) would extend the transportation fringe benefit to bicycle commuters.
  • H.R. 809 sponsored by Rep. Eric Cantor (R-VA) would make permanent the individual income tax rates for capital gains and dividends.
  • H.R. 819 sponsored by Rep. Nancy Johnson (R-CT) would encourage guaranteed lifetime income payments from annuities and similar payments of life insurance proceeds at dates later than death by excluding from income a portion of such payments.
  • S. 381 sponsored by Sen. Gordon Smith (R-OR) would encourage guaranteed lifetime income payments from annuities and similar payments of life insurance proceeds at dates later than death by excluding from income a portion of such payments.
  • S. 387 sponsored by Sen. Chuck Hagel (R-NE) would provide tax incentives for the investment in greenhouse gas intensity reduction projects.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read  more information on Steptoe's tax practice