Daily Tax Update - March 22, 2012: Ryan Budget Passes Committee By One Vote

RYAN BUDGET PASSES COMMITTEE BY ONE VOTE:  Last night, the House Budget Committee approved Chairman Paul Ryan's (R-WI) Fiscal Year 2013 budget resolution ("Path To Prosperity") by a vote of 19-18.  The resolution cuts spending $5.3 trillion over ten years.

  • The tax components of Chairman 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.
  • Chairman Ryan issued the following statement:  "Elected representatives have a solemn obligation to help ensure that our children have more opportunity and inherit a stronger America than our parents gave us.  The Democrat-controlled Senate has failed to pass a budget in over 1,000 days, while the President still refuses to offer credible solutions to the most predictable economic crisis in our history.  Empty promises from Washington won’t pay our bills, strengthen our health and retirement programs, fix our economy or create jobs.  Such irresponsibility will, however, lead to a debt crisis that will fundamentally change America for the worse.  The Path to Prosperity budget tackles our generation’s greatest domestic challenge:  reforming and modernizing government to prevent an explosion of debt from crippling our nation and robbing our children of their future.  I am proud of my colleagues on the House Budget Committee who worked together to write and advance this budget, which puts our nation’s finances on a path to balance and pay off the debt.  Much work remains, but today we are happy to say we have taken another step on the path to prosperity."

WAYS AND MEANS TO REVIEW EXTENDERS:  Today, Ways and Means Committee Chairman Dave Camp (R-MI) and Select Revenue Measures Subcommittee Chairman Pat Tiberi (R-OH) issued the following statement regarding their plans to review the tax extenders:  "Far too many provisions in the tax code are temporary, making it hard for employers to plan, invest and create new jobs for American families.  That is one reason why we are committed to comprehensive tax reform.  An important part of comprehensive reform is to conduct a thorough review of the various targeted provisions in the Code commonly referred to as 'tax extenders.'  In 2010, House Republicans led the charge to review these provisions and over 70 (estimated at over $100 billion) were cleaned out of the Code.  In 2012, we must again examine these extenders, and the Committee will begin that process after the April recess." 

TAX BILLS INTRODUCED MARCH 21ST:

1.[112th] H.R.9 : Small Business Tax Cut Act
Sponsor: Rep Cantor, Eric [VA-7] (introduced 3/21/2012)      Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 3/21/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112th] H.R.4231 : To amend the Internal Revenue Code of 1986 to repeal certain tax breaks for gas and oil companies and to refund the revenue savings to registered vehicle owners.
Sponsor: Rep Yarmuth, John A. [KY-3] (introduced 3/21/2012)      Cosponsors (13)
Committees: House Ways and Means
Latest Major Action: 3/21/2012 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

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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