Daily Tax Update - July 13, 2009

WAYS AND MEANS TO RELEASE HEALTH CARE REFORM OFFSETS SOON:  House Ways and Means Chairman Charles Rangel is expected to release the revenue raisers to pay for health care reform in the next few days. Earlier today, President Obama called on Congress to pass health care reform. Obama said, “We are going to get this done. Inaction is not an option.” The President added, “For those naysayers and cynics who think that this is not going to happen, don't bet against us.” The President is scheduled to meet later this afternoon with Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, Senate Finance Chairman Max Baucus and Rangel at the White House.

  • Rangel's bill is expected to call for a graduated surtax on high income households that would raise $540 billion over 10 years to help cover the cost of the plan. According to recent reports, Rangel's proposal would tax households earning $350,000, $500,000 and $1 million annually at separate, graduated rates. The graduated surtax would be imposed in 2011. A mark up of the bill could occur Wednesday.

  • Last Friday, Rangel said, “We have decided that instead of putting pieces of different revenue raisers together, the best that we can do is more a graduated tax. There will be three different rates...at very small percentages – one, two, three, something like that.”

  • The Finance Committee will introduce its own financing options for a health care reform bill. Regarding the Ways and Means provision for a surtax on high income earners, Senate Assistant Majority Leader Richard Durbin said yesterday, “I think we're going to have a different approach. We understand that we have to combine cuts in actual spending on healthcare, savings from hospitals, from doctors, from health insurance companies, along with some new revenue.” Durbin added, “The Senate Finance Committee is considering a lot of different options. I don't want to preclude or select any option at this point.”

TAX BILL INTRODUCED JULY 10TH:
H.R.3178:  To amend the Internal Revenue Code of 1986 to allow the expensing of certain real property.
Sponsor: Rep Markey, Betsy [CO-4] (introduced 7/10/2009); Cosponsors (7)

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.