Daily Tax Update - March 2, 2011: Finance Schedules Hearing To Consider Tax Code's Effect On Job Creation and Economic Growth

FINANCE SCHEDULES HEARING TO CONSIDER TAX CODE’S EFFECT ON JOB CREATION AND ECONOMIC GROWTH:  On March 8, the Senate Finance Committee will continue its series of hearings on tax reform.  Next week's hearing is titled: "Does the Tax System Support Economic Efficiency, Job Creation and Broad-Based Economic Growth?"

  • The witnesses at the hearing will be:
    • Dr. Alan Auerbach, Robert D. Burch Professor of Economics and Law, UC Berkeley
    • Dr. R. Glenn Hubbard, Dean and Russell L. Carson Professor of Finance and Economics, Columbia University Graduate School of Business
    • Dr. James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government & Business Relations and Professor of Government, The University of Texas at Austin
    • Mr. Michael Graetz, Isidor and Seville Sulzbacher Professor of Law, Columbia Law School, New York, NY

WITNESS LIST ANNOUNCED FOR TOMORROW’S TAX REFORM HEARING:  Tomorrow, the House Ways and Means Subcommittee on Select Revenue Measures will hold a hearing on the special burdens that the tax code imposes on small businesses and pass-through entities and the need for comprehensive tax reform to address these problems.

  • The witnesses will be:
    • Dr. Robert Carroll, Principal, Qualitative Economics and Statistics, Ernst & Young LLP, Washington, DC
    • Ms. Patricia A. Thompson, Chair, Tax Executive Committee, American Institute of Certified Public Accountants, Piccerelli, Gilstein & Co. LLP, Providence, Rhode Island
    • Mr. Dennis Tarnay, Chief Financial Officer, Lake Erie Electric, Inc., Cleveland, Ohio
    • Dr. Donald B. Marron, Director, Tax Policy Center, The Urban Institute, Washington, DC

CONGRESS PASSES TWO-WEEK GOVERNMENT FUNDING BILL TO AVOID SHUTDOWN:  The House and Senate passed a two-week continuing resolution (CR) that would keep the government running through March 18 until a compromise can be reached on a year-long funding bill.  The funding resolution cuts approximately $4 billion in spending cuts to programs in the current fiscal year, which ends on September 30.  The CR contains funding to allow all government agencies, including the IRS, and programs to continue operating at the current level of spending for the next two weeks, except for several programs that will be terminated or cut.

  • Senate Majority Leader Harry Reid said, "We’re going to keep working toward a solution” for the rest of this fiscal year.  Reid added, “This time around it may not include everything Democrats want or everything the Republicans want, but we need to have a compromise."
  • President Obama said, "Living with the threat of a shutdown every few weeks is not responsible, and it puts our economic progress in jeopardy."
  • A summary of the cuts in the two-week CR can be accessed here

TAX BILLS INTRODUCED MARCH 1ST:
1.  [112nd] H.R.851: To amend the Internal Revenue Code of 1986 to extend certain renewable fuel tax incentives and to repeal fossil fuel subsidies for large oil companies.
Sponsor: Rep Braley, Bruce L. [IA-1] (introduced 3/1/2011)    Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 3/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2.  [112nd] H.R.860: To amend the Internal Revenue Code of 1986 to promote charitable donations of qualified vehicles.
Sponsor: Rep Larson, John B. [CT-1] (introduced 3/1/2011)    Cosponsors (2)
Committees: House Ways and Means
Latest Major Action: 3/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3.  [112nd] H.R.865: To amend the Internal Revenue Code of 1986 to extend the work opportunity credit to certain recently discharged veterans.
Sponsor: Rep Walz, Timothy J. [MN-1] (introduced 3/1/2011)    Cosponsors (1)
Committees: House Ways and Means; House Armed Services
Latest Major Action: 3/1/2011 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Armed Services, 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.

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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