Daily Tax Update - July 11, 2012: House Votes to Repeal Health Care Law

HOUSE VOTES TO REPEAL HEALTH CARE LAW:  Today, the House voted to repeal President Obama’s health care law by a vote of 244 to 185.  Five Democrats voted in support of repeal.  The Senate is unlikely to take the bill up and President Obama has said he would veto the bill if it reaches his desk.

  • House Speaker John Boehner said, “For those who still support repealing this harmful healthcare law, we're giving our colleagues in the Senate another chance to heed the will of the American people."

WHITE HOUSE ANNOUNCES INITIATIVES TO HELP SMALL BUSINESSES:  Today, the Obama Administration announced additional initiatives designed to help small businesses expand and create jobs.  

  • The Administration would let small businesses write off up to $250,000 in capital investments in 2013, such as machinery and equipment.  The Administration is also working on a set of regulatory reforms to the existing New Markets Tax Credit that will make it easier for community development entities (CDEs) to attract private sector funds for investment in startups and small businesses operating in lower‐income communities.
  • Additional information can be accessed here.

SENATE SMALL BUSINESS BILL CLEARS PROCEDURAL HURDLE:  The Senate voted yesterday to move forward and debate the "Small Business Jobs and Tax Relief Act" (S. 2237).  The bill would provide businesses with a tax credit equal to 10 percent of all new wages and compensation added in 2012, capped at $500,000.  It would also extend 100-percent bonus depreciation for all of 2012.

  • Senate Finance Committee Ranking Member Orrin Hatch filed an amendment to the bill yesterday, which would extend current tax policy through the end of 2013 (including the Bush tax cuts for all taxpayers) and instruct the Senate Finance Committee to undertake comprehensive tax reform during that time.  This morning, Senate Republicans offered to allow a vote in the Senate on the President’s plan for the limited extension of the Bush tax cuts in exchange for a vote on the Hatch amendment.  However, Senate Democratic Leadership blocked efforts for Hatch to offer his amendment.  Senate Minority Leader Mitch McConnell called for "One [vote] on the president’s proposal to raise taxes on nearly 1 million business owners in the middle of the worst economic recovery in modern times, and one [vote] that would extend current income tax rates for one year and task the Finance Committee to produce a bill that would enact fundamental, pro-growth tax reform."
  • Senate Majority Leader Reid said that he does not want to consider a tax cut package unless it includes tax increases for high-income individuals.  Reid said, "Let's debate the issue that is before us.  We’ll get to the tax issues."


  • Notice 2012-47 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008.  It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), and the 24-month average segment rates under § 430(h)(2).  In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.  The notice does not reflect changes to segment rates required under the Moving Ahead for Progress in the 21st Century Act (MAP-21).

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.