Daily Tax Update - January 27, 2011: Geithner Discusses Tax Reform

GEITHNER DISCUSSES TAX REFORM:  In an interview yesterday, Treasury Secretary Timothy Geithner discussed tax reform.   Geithner said that raising more revenue from businesses "isn't realistic," but added, "We can't raise taxes on individuals to lower business taxes."  When asked if "corporate tax reform would help economic growth," Geithner responded, "Lowering rates, removing the distortions in the present system, helps growth because it allows business to compete on the basis of performance and return rather than on their ability to get or protect special provisions in the tax code. If you level the playing field, you allow the market rather than the tax system to drive investment."  Regarding the corporate tax rate level, Geithner said, "To have a more competitive system, you want to try to bring down the rate closer to the range of our major trading partners. We have a high statutory rate, which is made necessary by all the special provisions. How low you can go depends on how much of the reform you can achieve."  Geithner added, "All businesses want lower taxes. But business understands that their success as businesses depends in part on what the government does—on education, infrastructure, national security....  Most business understand that we have limited resources, that we can't raise taxes on individuals to lower business taxes and that unsustainable long-term deficits hurt growth too."  Geithner also said, "We want to explore comprehensive individual reform. There's a good case for doing both. We want to start the process of exploring what's possible."  When asked if he was "willing to consider a shift away from the current system, in which multinationals are taxed on their world-wide profits, to a territorial one, in which they're taxed only on their US profits?," Geithner responded, "We want to find a way to reduce the incentive to shift income overseas, to increase the incentive to invest in the US and to put US firms that operate overseas on a level playing field with their competitors."

SENATE BUDGET COMMITTEE SCHEDULES HEARING ON TAX REFORM:  On February 2, the Senate Budget Committee will hold a hearing focused hearing on tax revision issues, focusing on fiscal responsibility.  The witness list for the hearing has not been released.

NEW FINANCE MEMBERS NAMED:  Republican senators Tom Coburn (Ok) and John Thune (SD), along with Democratic Sen. Benjamin Cardin (MD) have been named to the Senate Finance Committee.  Sen. Orrin Hatch (R-UT) will serve as Ranking member.

TAX BILLS INTRODUCED JANUARY 26TH:
1. [112nd] H.R.450: To repeal limitations imposed by the Patient Protection and Affordable Care Act on health-related tax benefits under the Internal Revenue Code of 1986 and to treat high deductible health plans as qualified health plans under such Act.
Sponsor: Rep Reichert, David G. [WA-8] (introduced 1/26/2011)      Cosponsors (1)
Committees: House Ways and Means; House Energy and Commerce
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

2. [112nd] H.R.462: To terminate the Internal Revenue Code of 1986.
Sponsor: Rep Goodlatte, Bob [VA-6] (introduced 1/26/2011)      Cosponsors (40)
Committees: House Ways and Means; House Rules
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

3. [112nd] H.R.467: To amend the Internal Revenue Code of 1986 to restore the deduction for the travel expenses of a taxpayer's spouse who accompanies the taxpayer on business travel.
Sponsor: Rep Berkley, Shelley [NV-1] (introduced 1/26/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

4. [112nd] H.R.468: To amend the Internal Revenue Code of 1986 to repeal the reduction in the deductible portion of expenses for business meals and entertainment.
Sponsor: Rep Berkley, Shelley [NV-1] (introduced 1/26/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

5. [112nd] H.R.476: To amend the Internal Revenue Code of 1986 to make permanent the deduction of State and local general sales taxes.
Sponsor: Rep Brady, Kevin [TX-8] (introduced 1/26/2011)      Cosponsors (21)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

6. [112nd] H.R.477: To amend the Internal Revenue Code of 1986 to extend the exemption from employer Social Security taxes with respect to previously unemployed individuals, and to extend the credit for the retention of such individuals.
Sponsor: Rep Braley, Bruce L. [IA-1] (introduced 1/26/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

7. [112nd] H.R.481: To amend the Internal Revenue Code of 1986 to allow a credit against income tax for qualified conservation contributions which include National Scenic Trails.
Sponsor: Rep Connolly, Gerald E. "Gerry" [VA-11] (introduced 1/26/2011)      Cosponsors (3)
Committees: House Ways and Means; House Natural Resources
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

8. [112nd] H.R.485: To amend the Internal Revenue Code of 1986 to provide for a credit which is dependent on enactment of State qualified scholarship tax credits and which is allowed against the Federal income tax for charitable contributions to education investment organizations that provide assistance for elementary and secondary education.
Sponsor: Rep Franks, Trent [AZ-2] (introduced 1/26/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

9. [112nd] H.R.488: To amend the Internal Revenue Code of 1986 to repeal the excise tax on medical devices.
Sponsor: Rep Gerlach, Jim [PA-6] (introduced 1/26/2011)      Cosponsors (8)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

10. [112nd] H.R.499: To amend the Internal Revenue Code of 1986 to increase the standard charitable mileage rate for delivery of meals to elderly, disabled, frail and at risk individuals.
Sponsor: Rep Latta, Robert E. [OH-5] (introduced 1/26/2011)      Cosponsors (2)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

11. [112nd] H.R.500: To amend the Internal Revenue Code of 1986 to increase the manufacturer limitation on the number of new qualified plug-in electric drive motor vehicles eligible for credit.
Sponsor: Rep Levin, Sander M. [MI-12] (introduced 1/26/2011)      Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

12. [112nd] H.R.508: To amend the Internal Revenue Code of 1986 to make permanent the child tax credit and to allow for adjustments for inflation with respect to the child tax credit.
Sponsor: Rep Posey, Bill [FL-15] (introduced 1/26/2011)      Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

13. [112nd] H.R.518: To amend the Internal Revenue Code of 1986 to allow Indian tribes to receive charitable contributions of apparently wholesome food.
Sponsor: Rep Young, Don [AK] (introduced 1/26/2011)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 1/26/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

14. [112nd] S.208: A bill to amend the Internal Revenue Code of 1986 to extend the 100 percent exclusion for gain on certain small business stock.
Sponsor: Sen Kerry, John F. [MA] (introduced 1/26/2011)      Cosponsors (1)
Committees: Senate Finance
Latest Major Action: 1/26/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

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.

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