Treasury Releases Blue Book for FY 2008
The Treasury Department unveiled its General Explanations of the Administration's Fiscal Year 2008 Revenue Proposals also known as the "Blue Book."
The Bush administration proposed tax measures that will weigh in with a net cost of $1.9 trillion over the next 10 years. A substantial portion of the Blue Book re-proposes measures that have been included in Blue Books for the last several years.
At the top of the administration's list of proposals were provisions to make permanent the income tax cuts enacted in 2001 and 2003.
A string of proposals would make certain tax breaks permanent or would extend them, which includes:
- Permanently extending the research and experimentation credit
- Tax-free withdrawals from IRAs for charitable contributions
- The enhanced deduction for corporate contributions of computer equipment for educational purposes
- The increased limits on contributions of partial interests in real property for conservation purposes
- The basis adjustment to stock of S corporations contributing appreciated property
Health care insurance and compliance measures were among the new categories in the 2008 proposals.
The new standard deduction for health insurance (SDHI) would replace all pre-tax employee health insurance benefits, both premium exclusions and flexible spending account contributions.
The new compliance initiatives are an attempt at closing the "tax gap," which now stands at close to $300 billion annually. First, the IRS has been allocated an additional $410 million for programs to reduce the tax gap including research, technology, enforcement and taxpayer service. In addition, the administration's 2008 budget proposes 16 legislative changes to implement plans to close the tax gap.
The legislative proposals encompass four broad initiatives to::
- Expand information reporting
- Improve compliance by business
- Strengthen tax administration
- Expand penalties