Tax Reform Will Be Priority for Next Congress, Says Ways and Means Aide
Last week, a top congressional aide said tax reform will be top-of-mind for the next chairman of the tax-writing committee. Meanwhile, an accountants’ group is calling for quick action on tax extender legislation.
Legislation to overhaul the tax code will be a high priority in the next Congress, a top aide for the House Ways and Means Committee said last week.
Speaking at an October 21 event hosted by the D.C. Bar Taxation Section, Aharon Friedman of the Ways and Means majority staff said tax reform will be championed by the next chairman of the tax-writing committee, presumed to be Rep. Paul Ryan (R-WI). Ryan would take over Ways and Means from Rep. Dave Camp (R-MI), who is term-limited this year and who released a detailed tax reform discussion draft in February.
While the Camp plan did not advance this year, it laid the foundation for tax reform in the next Congress, Friedman said. Many tax experts have speculated that Congress and the White House could reach consensus on revamping corporate tax laws early next year, but Bloomberg BNA Daily Tax Report [subscription required] quoted Friedman as saying that corporate tax reform alone is unlikely because small-business owners that pay taxes through the individual side of the code would get left by the wayside.
In recent weeks, Ryan has said that it could take a few years to achieve consensus on a tax reform plan. In remarks to the Financial Services Roundtable, Ryan said analysis of any plan should use “dynamic scoring,” which takes into account the macroeconomic effects resulting from changes to the tax code. That analysis would require less revenue directly from the tax code, instead forecasting economic growth resulting from various policy changes. Democrats in general oppose dynamic scoring as an inaccurate means of predicting future growth.
Accountants Seek Tax Extenders
Meanwhile, the American Institute of CPAs is calling on Congress to prioritize passing tax extenders legislation to avoid further uncertainty in the business sector and prevent unnecessary delays during the upcoming tax-filing season.
Tax extenders are accounting professionals’ biggest legislative concern at the moment, Troy Lewis, incoming chair of AICPA’s Tax Executive Committee, told Bloomberg BNA last week. “It is a challenge beyond measure at this point,” he said. “We really are paralyzed as to what to say. Clients caught in a no-man’s land will do nothing. It’s not healthy for the economy and for the country.”
Lewis said businesses are most concerned about legislation to extend bonus depreciation, which allows businesses to deduct immediately or expense the cost of new equipment purchases.
The House and Senate have separately tried to address the dozens of tax provisions that expired at the end of 2013, with the House pursuing a permanent extension of a handful of extenders that have a business focus, and the Senate pushing to extend most of the expired tax provisions for two years. The Senate bill easily passed the Finance Committee earlier this year but stalled on the floor because of disagreements over an open amendment process.