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Bramwell's Lunch Beat: Hillary’s Exit Tax, Tax Break Blues, Cadillac Tax

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Dec 8th 2015
Staff Writer and Editor AccountingWEB
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Clinton said to plan new corporate tax proposals, including ‘exit tax'
Democratic presidential candidate Hillary Clinton on Wednesday will unveil proposals to deter US companies from shifting profits overseas, including an “exit tax” to penalize companies that perform so-called tax inversions, wrote Jennifer Epstein of Bloomberg. The exit tax would apply to companies like Pfizer Inc. that move abroad for tax advantages, according to an official who didn't want to be named. Clinton will also restate her support for raising – to 50 percent from 20 percent – the threshold for shares a US company can transfer to a foreign owner to gain tax benefits. The Obama administration also backs raising the threshold. Clinton has said Pfizer's $160 billion deal with Allergan PLC, which will move the New York-based drugmaker's tax address to Ireland, would hurt American taxpayers.

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Paul Ryan doubts Congress can finish this week
Jake Sherman of Politico wrote that House Speaker Paul Ryan (R-WI) expressed doubt that Congress can finish its business this week, saying work on renewing expiring tax breaks and funding the government might stretch later into December. Ryan, speaking on 1380-AM in Janesville, Wisconsin, said “it might take us more than just this week to get these issues put together correctly.” The government runs out of spending authority on Dec. 11. The government is unlikely to shut down, as congressional leaders would pass a short-term stopgap spending bill.

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Negotiations over year-end spending bill hit a tax snag
Kelsey Snell and Karoun Demirjian of the Washington Post wrote that after days of scrambling to hammer out an agreement to avert a government shutdown, negotiators are still deadlocked over several policy riders that GOP lawmakers want to attach to the must-pass legislation, as well as over what to do with a package of tax breaks that could also be added to the bill. Key lawmakers on Monday said how long to extend the tax breaks for businesses and individuals has become a particularly thorny issue, with some members worried about the cost of the package and others complaining there are too many giveaways to corporate interests. Senate Finance Committee Chairman Orrin Hatch (R-UT) expects the House will pass a two-year tax extenders package this week and negotiators will continue to work on a broader deal. “But if Democrats will work with us we'll get it done,” Hatch said.

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Brady prepares backup plan to extend tax breaks
House Ways and Means Committee Chairman Kevin Brady (R-TX) on Monday night offered legislation that would serve as a backup in case a deal on a bigger bill to extend a host of expired and expiring tax breaks can't be reached, wrote Naomi Jagoda of The Hill. The proposal would renew dozens of tax provisions that expired at the end of 2014 through 2016. Brady said the House will consider the two-year bill “to ensure before we leave, those provisions are extended.” If Congress does not renew the expired provisions by the end of the year, the IRS could delay the start of the tax-filing season. In addition to renewing tax breaks, Brady's bill also includes provisions related to real-estate investment trusts, IRS reforms, and the US Tax Court.

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Delay of Obamacare's ‘Cadillac tax' goes down to the wire
Peter Sullivan of The Hill wrote that a senior GOP lawmaker on Monday said action on delaying Obamacare's “Cadillac tax” would depend on whether negotiators reach a broad tax deal – or instead fall back on a narrower package. Whether lawmakers succeed in delaying the tax – and easing a separate excise tax on medical devices also created by the healthcare law – could depend on negotiations over provisions unrelated to health care. House Democratic Leader Nancy Pelosi (D-CA) wants to index the Child Tax Credit in the tax extenders package so that it rises with inflation. “We are not going to accept Pelosi's insistence on indexing of the tax credits,” the senior GOP lawmaker said Monday. “If that insistence continues, [the] deal will fall apart and likely fall back to [a] past, standard year-end package. That would mean delay of Cadillac tax and medical device delay would all fall out of the package.”

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Quick Links:

  • Finance chiefs get ready for new rules (CFO Journal)
  • US trade officials challenging China over aircraft tax policy (The Hill)
  • Mileage-based gas tax backers tout $305 billion highway bill (The Hill)
  • The GOP's tax warfare (Huffington Post)
  • Chance for a year-end tax deal is fading (Wall Street Journal)
  • How the low-tax US stacks up against other countries (Wall Street Journal)
  • Dear Donald Trump: The Washington Post is not a tax dodge for Amazon (Re/code)
  • Swiss bank program nonprosecution agreements accelerating (Tax Analysts)
  • The ‘Google tax': What it is, and why we should be cautious (Tax Foundation)
  • Four things we can learn about millennials from their tax returns (Tax Foundation)

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