The voices of Tax Policy Center's researchers and staff
Wait, are Ds and Rs really on the same page? In remarks yesterday, Treasury Secretary Jack Lew expressed optimism for a business tax overhaul, noting a “great deal of overlap” between the White House framework and recent Republican proposals. House Ways and Means Chairman Paul Ryan agreed that there are areas where Democrats and Republicans can work together. Vice President Joe Biden, in meetings with senators, reports that despite of “a lot of outside pressures from particular interest groups” there may still be room to deal.
Maybe not. With no chance of success, Democrats introduced legislation this week against corporate inversions. Senate Minority Whip Dick Durbin, House Ways and Means Committee Ranking Member Sandy Levin, Senator Jack Reed, and Representative Lloyd Doggett have a bill which the Joint Committee on Taxation estimates would save the US nearly $34 billion in revenue… but Republicans prefer comprehensive corporate tax reform.
As for Obama’s tax proposals? Modest, not radical—or ambitious. While the President’s tax agenda for the middle class has drawn sharper distinctions between Democrats and Republicans, the Urban Institute’s Gene Steuerle finds the policies themselves to be less than ambitious. The central element of the President’s State of the Union address—his tax proposals—“tinker around the edges of tax policy and count on an overloaded and troubled agency, the IRS, to administer them.”
Obama’s retirement security plans? Solid, and practical. TPC’s Bill Gale and David John of Brookings and AARP find that the President “continues to make retirement security a priority with practical solutions that would allow many more Americans to build retirement security through their own efforts. His proposals promote the kind of values and self-reliance that both sides of the political spectrum find attractive.” Gale and John have proposed similar ideas in the past. However, others are not so happy with a companion Obama proposal to cap the size of tax-advantaged retirement plans.
And the President’s capital gains plan? Flawed but fixable. Gale has also looked at how to fix a troublesome problem with Obama’s plan to tax capital gains at death. The trouble: For many, especially business owners and those who have held stock for a long time, figuring cost basis can be difficult. Bill suggests a safe harbor--allowing them to declare a standard basis of, say, 20 percent of an asset’s value at the owner’s death. Think of it as a standard deduction for the rich.
On the Hill this morning… The Senate Finance Committee holds a hearing on jobs and a healthy economy. The panel will hear from John Engler of the Business Roundtable, Robert Hall of Stanford University, and Justin Wolfers of the University of Michigan.
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Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.