Update: U.S. Corporate Tax Reform Likely On Hold Until November 2014

Jan 10 2014, 10:42am CST | by

Update: U.S. Corporate Tax Reform Likely On Hold Until November 2014

Despite their end-of-year push to overhaul the U.S. corporate tax code, Senators Max Baucus (D-Mont.) and Dave Camp (R-Mich.), who chair the tax-writing committees in Congress, appear to have missed their window of opportunity to implement any significant reforms prior to the mid-term elections in November 2014.

As the Financial Times reported, citing a number of Beltway insiders, the tax reform agenda will likely be sidelined by Baucus’ recent nomination as the next U.S. ambassador to China.  Chris Krueger, a policy analyst at Guggenheim Securities in Washington was quoted:

“If tax reform was going to happen, Max wouldn’t be leaving to go to Beijing.  He’s going about as far away as you can humanly go.  That was it for me.”

Remy Farag, senior tax analyst with Thomson Reuters who follows the reform debate closely said he thinks the delay in any substantial corporate tax reform has less to do with Baucus’ move to China and more to do with partisan politics.  He explains: “Despite all of the rhetoric on Capitol Hill about tax reform being around the corner, the prospects for reform have been slim due to the political makeup of the House.  The truth is, we are likely at least one congressional election season away from any kind of meaningful tax reform.”

An article in the Columbus Dispatch echoed Farag’s sentiment by diving further into the political ramifications Baucus’ move could have on the bipartisan legislation.  Quoting Rep. Pat Tiberi (R-Ohio), a member of the House Ways and Means committee, the Dispatch wrote:

“Tiberi worries that politics will quickly eclipse any progress. He said that despite years of work, a bill runs the risk of becoming the House Republican bill as soon as Camp introduces it, meaning it would be immediately politicized. It will take far more than the two congressional committees, he said, to get a bill passed.”

Adding to the complexity facing lawmakers are lobbying efforts by large U.S corporations who’ve had decidedly mixed reviews on the proposed corporate tax legislation.  As I wrote in December, the Alliance for Competitive Taxation (ACT), which is made up of dozens of multinational corporations who support tax reform, has been critical of the Baucus/Camp plan.  Upon its proposal, the organization released the following statement:

“While we are encouraged by Chairman Baucus’ continued commitment to pass comprehensive tax reform, we are concerned that the international reform ideas in the staff draft undermine the stated goals of creating jobs, generating growth, and making America more competitive around the world. The Chairman has recognized how today’s uncompetitive tax code is already leading to the loss of U.S. companies. Unfortunately, many of these proposals would put the U.S. tax system even more out of line with the rest of the world.”

Could Congress surprise us and hammer out a corporate tax reform law in the first quarter?  It’s certainly possible.  House Budget Committee Chairman Paul Ryan (R-Wis.) has suggested that we may see a tax reform bill in early 2014.  But we’re still nowhere near the finish line.  To get there, Congress will need to get past the rigid partisanship that defined 2013 while also carefully weighing the concerns of big business.

Source: Forbes Business


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Twitter to track apps on your smartphone
New York, Nov 27 (IANS) The micro-blogging site Twitter has launched a new move to track which apps are installed on your cellphone.
Copper essential for resting brain too
New York, Nov 27 (IANS) A new study has found that proper copper levels are essential to the health of the brain at rest.
Dogs clearly listen to what we say
London, Nov 27 (IANS) Dogs pay attention not only to who we are and how we say things, but also to what we say, shows a study.
Eye's 'glassy' proteins behind sight deterioration
London, Nov 27 (IANS) The age-related long-sightedness could be due to proteins in eye-lens that are converted from a fluid solution to a solid glassy state, making the lens more rigid, says a study.

Latest from the Network

Modi, Sharif shake hands, chat at reception
Kathmandu, Nov 27 (IANS) After a day when they apparently ignored each other in front of cameras, Indian Prime Minister Narendra Modi and Pakistani Premier Nawaz Sharif shook hands and met briefly during the retreat at...
Read more on Politics Balla
Arsenal's target is to top Group D: Cazorla
London, Nov 27 (IANS) Arsenal mid-fielder Santi Cazorla said that after securing the last 16 spot in Champions League, the club's next target will be the top place of the group. The English club reached the knockout...
Read more on Sport Balla
Five killed in Kabul suicide car bombing
Kabul, Nov 27 (IANS) At least five Afghan civilians were killed and 34 others wounded Thursday morning when a suicide car bombing targeted a British embassy armoured vehicle in eastern Kabul, sources said. The British...
Read more on Politics Balla
Twitter to track apps on your smartphone
New York, Nov 27 (IANS) The micro-blogging site Twitter has launched a new move to track which apps are installed on your cellphone. "To help build a more personal Twitter experience for you, we are collecting and...
Read more on Politics Balla
Galatasaray going through very difficult moment: Prandelli
Brussels, Nov 27 (IANS) Galatasaray coach Cesare Prandelli said that the club are going through "very difficult moment" following the 0-2 away defeat to RSC Anderlecht in the Champions League. "We will continue on our...
Read more on Sport Balla
Pele remains in hospital in stable condition
Rio de Janeiro, Nov 27 (IANS) Brazil football legend Pele remains in hospital as he receives ongoing treatment for a urinary tract infection. The 74-year-old is being treated with intravenous antibiotics and is in a...
Read more on Sport Balla
Simeone salutes his players for 4-0 win over Olympiakos
Madrid, Nov 27 (IANS) Atletico Madrid coach Diego Simeone praised his players after they defeated Olympiakos of Greece 4-0 in the Champions league at the Vicente Calderon Stadium here Wednesday. "We have produced some...
Read more on Sport Balla
Basel made life difficult for us: Gareth Bale
Geneva, Nov 27 (IANS) Real Madrid winger Gareth Bale said Basel posed enough threats after Real won over the Swiss club 1-0 in the Champions League Wednesday night. "Basel are still battling to qualify, still fighting...
Read more on Sport Balla
Tennis star Murray to marry
London, Nov 27 (IANS) Two-time Grand Slam champion Andy Murray is set to marry long-time girlfriend Kim Sears, Murray's management team has announced. Murray, 27, and Sears, 26, have been a couple since meeting at the...
Read more on Sport Balla
Natalie Portman up for Jobs biopic
Natalie Portman is in talks for a role in the Steve Jobs biopic. The 'Black Swan' actress is negotiating a deal to play a ''major role'' in the movie about the Apple co-founder - who died from pancreatic cancer in 2011...
Read more on Movie Balla