Daily Tax Update - June 3, 2008

FINANCE SCHEDULES HEARING ON BUSINESS TAX ISSUES:  On June 5, the Senate Finance Committee will hold a hearing to “explore the way the US currently taxes the income of domestic, non-corporate businesses and to identify the benefits to the US economy of the current multi-tiered pass-through regime.” The hearing is entitled, “C, K, or S:  Exploring the Alphabet Soup of Small Business Choices in Advance of Tax Reform.” This will be the third in the series of hearings preparing for tax reform in 2009.

PRESIDENT CALLS FOR MAKING TAX CUTS PERMANENT:  In a speech to business leaders yesterday, the President discussed the economy and his tax cuts. The President said, “I know you believe, and I firmly believe, that those tax cuts were part of that engine for that economic vitality. And the economy is not doing as well as we'd like to do - like it to do today, but there's no question that the tax cuts provided economic vitality. And now the question is, what will the Congress do? Given the facts that tax cuts have worked, what will be the congressional response? Our response is, let's make those tax cuts permanent. Let's make sure that there is certainty during uncertain times in our economy. Imagine if you're trying to plan - plan your life, plan the future for your small business - and you don't know whether or not Congress is going to keep your taxes low. It makes your environment more uncertain.” The President added, “You hear a lot of talk out of Congress about, you know, the economic slowdown, and we understand there's an economic slowdown and we're concerned about the economic slowdown. But one of the things that they can do to help make sure that this economy recovers like we believe it will is to make the tax cuts permanent.”

  • The President’s remarks can be accessed via: http://www.whitehouse.gov/news/releases/2008/06/20080602-2.html
  • The office of Senate Majority Leader Harry Reid responded, “President Bush and his Republican allies continue to call for giveaways to multimillionaires and special interests, which have turned a budget surplus into record deficits and soaring debt and driven our economy to the brink of recession.”

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 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.