By SEMA Washington, D.C., Staff
Leaders of the House Ways and Means Committee, the primary tax-writing committee in Congress, have released recommendations for rewriting the American tax code. The “Tax Reform Act of 2014” is an ambitious legislative package intended to simplify both the corporate and individual tax codes. Last year, the committee convened 11 separate bipartisan “tax reform working groups” to help craft the recommendations. Each group focused on a different issue, including manufacturing, energy, income and tax distribution and small business/pass-throughs. The working groups obtained input from stakeholders, academics, the general public and other members of Congress.
Among the most important reforms include a top corporate tax rate of 25% to be phased in over five years, a permanent research and development (R&D) tax credit, making permanent enhanced Section 179 expensing for small businesses, a modified capital cost recovery system, a repeal of the corporate alternative minimum tax (AMT) and a repeal of “last in, first out” (LIFO) rules with transition rules. The proposals are revenue neutral, meaning that they should not raise taxes or produce deficits.
While the proposals include several SEMA-supported provisions, prospects for immediate consideration by Congress are weak. Key House and Senate leaders indicated that Congress will not take up tax reform legislation before the November election. Nevertheless, ongoing discussion is expected, and at some point before the election, Congress is expected to address tax provisions that expired in 2013, such as the R&D tax credit.
View a detailed executive summary of the “Tax Reform Act of 2014.” For more information, please contact Dan Sadowski at email@example.com.
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