Daily Tax Update - January 18, 2008

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RECONVENES ON JANUARY 22, 2008

PRESIDENT OUTLINES PRINCIPLES FOR ECONOMIC STIMULUS PLAN:  Today, President Bush called for an economic stimulus package equal to about 1 percent of US gross domestic product (between $140 billion and $150 billion).  The President said, “Passing a new growth package is our most pressing economic priority. . . By passing a growth package quickly, we can provide a shot in the arm to keep a fundamentally strong economy healthy, and it will help keep economic sectors that are going through adjustments, such as the housing market, from adversely affecting other parts of our economy.” 

  • The President said that the stimulus package:
    • “Should be big enough to make a difference in an economy as large and dynamic as ours.  A package that is about one percent of GDP would be sufficient to provide a boost to the economy.
    • Should be built on broad-based tax relief that will directly affect economic growth, not Federal spending that would have little immediate impact on our economy.
    • Should be temporary and take effect right away so we can get help to our economy when it is needed most.
    • Should not include any tax increases.”
    • The President said that in order for the stimulus package to be effective, the package “must include tax incentives for American businesses – including small businesses – to make investments in their enterprises this year . . .  and must also include direct and rapid income tax relief for the American people.”
    • Additional information can be accessed via:  http://www.whitehouse.gov/news/
  • Today, Senate Majority Leader Harry Reid (D-NV) said, “I am encouraged and share the president's view that we need prompt bipartisan action to strengthen our economy. I also agree that our focus must be on finding temporary measures that will do the job effectively,”
  • House Majority Leader Steny Hoyer (D-MD) said, “There is a broad consensus that quickly enacting a simple, focused and temporary plan that puts money in the hands of low- and middle-income Americans will be the most effective shot in the arm to our nation's economy.”

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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.