Daily Tax Update - March 20, 2012: Ryan Offers New Budget Proposal

RYAN OFFERS NEW BUDGET PROPOSAL: Today, House Budget Committee Chairman Paul Ryan (R-WI) unveiled a Republican alternative fiscal year 2013 budget proposal.  Ryan’s budget plan, titled "The Path to Prosperity," is similar in many ways to his fiscal 2012 budget.  However, his new plan includes a territorial tax system similar to the discussion draft proposed last year by House Ways and Means' Dave Camp.  In his summary, Ryan said, "We’re advancing a budget that builds upon a bipartisan consensus for principled solutions: real spending discipline and restored economic freedom; patient-centered health care reform; and pro-growth tax reform. The House Republican budget – The Path to Prosperity – offers a clear choice of two futures. We’re putting our trust in the American people to choose a brighter future for generations to come."

  • The tax provisions in Ryan’s budget include:
    • "Reform[ing] the broken tax code to spur job creation and economic opportunity by lowering rates, closing loopholes, and putting hardworking taxpayers ahead of special interests."
    • Consolidating the current six individual income tax brackets into two brackets of 10 and 25 percent and repealing the Alternative Minimum Tax.
    • Reducing the corporate rate to 25 percent.
    • Implementing a "territorial" tax system.
  • In response to Ryan’s budget, House Ways and Means Chairman Dave Camp issued the following statement in support.  Camp said, "After a year of hearings, Chairman Camp and Ways and Means Committee Republicans are ready to take the next step in tax reform.  As a result, the House Republican Budget Resolution incorporates pro-growth tax components that were transmitted in a letter signed by all of the Republican Members of the House Ways and Means Committee, led by Chairman Dave Camp.  This year's House Republican Budget Resolution builds on the progress of last year (which set top individual and corporate rates at 25 percent) by adding three components designed to create greater innovation, investment and job creation here in the United States.  These policies include: (1) Consolidating the current six individual income tax brackets into just two brackets of 10 and 25 percent; (2) Repealing the Alternative Minimum Tax, which currently threatens 31 million middle-class families with higher taxes; and (3) Shifting from a 'worldwide' to a 'territorial' tax system that puts American companies and their workers on a level playing field with foreign competitors and encourages investment and hiring in the United States."
  • The budget can be accessed here.
  • The text can be accessed here.

TAX BILL INTRODUCED MARCH 19TH:

H.R.4202: To amend the Internal Revenue Code of 1986 to extend the exclusion from gross income of discharges of qualified principal residence indebtedness.

Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 3/19/2012)      Cosponsors (13)

Latest Major Action: 3/19/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

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.