Author : David Brumbaugh
Publisher :
ISBN 13 :
Total Pages : 20 pages
Book Rating : 4.:/5 (15 download)
Book Synopsis Major Tax Issues in the 110th Congress by : David Brumbaugh
Download or read book Major Tax Issues in the 110th Congress written by David Brumbaugh and published by . This book was released on 2007 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: As 2006 came to a close, congressional leaders in the tax-writing committees and elsewhere have provided some indications of tax issues that may be on the congressional agenda in 2007. One issue whose urgency was reduced, however, was the fate of a set of temporary tax benefits (the "extenders") that generally expired at the end of 2005: Congress approved a bill extending the provisions (the Tax Relief and Health Care Act of 2006; P.L. 109-432) during the first week of December in its post-election session. Nevertheless, a number of significant tax issues remain that Congress may address in 2007. Prominent among upcoming issues is the alternative minimum tax (AMT) for individuals. Under current law, individuals are generally required to pay either the structural components of the AMT are not indexed for inflation. Thus, given rising prices, the growth of incomes, and enactment of tax cuts under the regular tax, a growing proportion of taxpayers are subject to the AMT each year; and its coverage has begun to affect middle-class taxpayers (along with the upper-income individuals who were those principally subject to the tax in prior years). In past years, Congress has addressed the growth of the AMT by enacting temporary measures ("patches") that restrict its scope. Recently, however, Congressional leaders have expressed an interest in seeking a more long-term solution to the AMT's increased scope. Other tax issues that Congress may address include the question of whether to extend the broad tax cuts first enacted in 2001 -- for example, the expanded child credit, reduced individual tax rates, tax cuts for married couples, and repeal of the estate tax. The cuts are scheduled to expire at the end of 2010, and during 2006, Congress evinced considerable interest in making the tax cuts permanent. Notwithstanding the results of the mid-term elections, the 110th Congress may return to the question of extending the tax cuts in either their initial or altered form. In the current era of federal budget deficits, a dilemma with tax-cutting measures is their likely cost in terms of foregone tax revenue. Extending the 2001 tax cuts or repealing the AMT, for example, would reduce tax revenue by substantial amounts. Accordingly, there has been some discussion of a number of revenue-raising measures that would offset some or all of the cost of revenue-losing tax cuts. Items that have been mentioned prominently include increased attention to the "tax gap"--The difference between the taxes U.S. individuals and firms owe and what they actually pay -- as well as tax shelters, restricting tax benefits for U.S. firms that operate abroad, and restricting tax benefits for oil companies. In addition, some in Congress have indicated support for strengthening rules designed to restrict the federal budget deficit. Congress, of course, does not consider tax policy in an economic or budgetary vacuum. This report thus provides a broad view of tax policy's context before taking a closer look at the particular tax issues that appear likely to arise in 2007.
