Martin A. Sullivan (Tax Analysts) has published What the Debt Limit Debacle Teaches Us About Tax Reform, 132 Tax Notes 215 (July 18, 2011):
Tax reform will not be a part of the legislation that raises the debt limit. Congress and President Obama cannot even agree on the broad outlines of reform. And even if they could, the multitude of political problems and technical issues are too great and too complicated for legislation by August 2….
What conditions are necessary for a productive fresh start? To avoid just another toothless blue-ribbon panel like the Bowles-Simpson commission, Obama — like Reagan in 1984 — must put the prestige and the technical expertise of Treasury behind the effort. But hasn’t Treasury been doing tax reform since the president’s State of the Union address? Yes, but it is all behind closed doors, so most of what undoubtedly is first-class staff work just accumulates in the files. There is no progress without actual proposals to which citizens and Congress can respond. There is no leadership. Some secrecy must be sacrificed. Some political capital must be expended. As in 2004 and 2005, Treasury needs to share its tax reform findings with the public. …
Based on public statements (mostly from Democrats) and scattered press reports about recent negotiations, the following paragraphs list proposals that are likely to attract initial attention during the next round of tax reform….
- Eliminate the LIFO Mehtod of Accounting
- Repeal Oil Company Tax Breaks
- Eliminate Graduated Corporate Rates
- Eliminate Capital Gains Treatment of Carried Interest for Fund Managers
- Limiting the Benefit of Itemized Deductions to 28%
- Close Tax Haven Loopholes
- Impose Corporate Tax on Passthrough Entities
- Extend the Depreciable Life of Corporate Aircraft to Seven Years
- Repeal the 45-Cent-Per-Gallon Tax Credit for Corn Ethanol
- Repeal the Deduction for Domestic Production Activities
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