Daily Tax Update - June 3, 2009

RANGEL DISCUSSES TAX REFORM:  In a speech yesterday, House Ways and Means Committee Chairman Charles Rangel said that while he would solicit input from the business community about overhauling the tax code, they must be prepared to compromise about their concerns.

  • Rangel said, “We expect that you would be in a position to know that if you don't play in terms of helping us to wipe out some of the complexities we have in terms of the individual tax code or the corporate tax code...if you can't deal with people who are there to try to do the right thing, then it means the Congress, the Ways and Means Committee, the Finance Committee, is really going to move on without you.” 
  • Rangel said that he hopes to lower the corporate tax rate from 35 percent to as low as 28 percent, but there may be some controversial revenue raisers to help achieve this goal. Rangel said, “Please take into consideration the arguments that we have in trying to believe that we have to raise revenue...and that we believe people should pay a fair tax on monies that they earn. If we all come together knowing that in this year, certainly in this term of the president, we're going to have tax reform, that gives us plenty of time to talk about the equities and the inequities and to make your case.”
  • Rangel said that he hoped that Republicans would not view the revenue raisers his new tax reform bill as tax increases. Rangel added, “That's the only way you can't move forward. If we're going to have a group of people that say generally speaking they're at a disadvantage because of the tax rates, then they have to be able...to assist us so that it would help cut the political pain of those people that were losing preferential treatment. But if we're going to find a group of people that are going to say that we don't want anyone to lose the benefits that they receive, then of course politically we can't do anything about it.”

TAX BILLS INTRODUCED JUNE 2ND:
H.R.2649: To amend the Internal Revenue Code of 1986 to modify the new energy efficient home credit and to provide a credit against tax for the purchase of certain energy efficient homes.
Sponsor: Rep Bean, Melissa L. [IL-8] (introduced 6/2/2009)      Cosponsors (None)

H.R.2655: To amend the Internal Revenue Code of 1986 to expand and extend the first-time homebuyer credit.
Sponsor: Rep Burton, Dan [IN-5] (introduced 6/2/2009)      Cosponsors (3)

H.R.2658: To amend the Internal Revenue Code of 1986 to increase the estate and gift tax unified credit to an exclusion equivalent of $5,000,000, to adjust such amount for inflation, to repeal the 1-year termination of the estate tax, and for other purposes.
Sponsor: Rep Capuano, Michael E. [MA-8] (introduced 6/2/2009)      Cosponsors (None)

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
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