On April 10, 2013, the White House released its proposed budget for fiscal year 2014. The budget contains significant tax proposals related to renewable energy, research and job creation, as well as numerous changes affecting corporate, partnership and international tax. It also contains numerous individual tax proposals, many of which are focused on increasing revenues raised from high-income earners. Many of the proposals are the same as or very similar to proposals made in previous White House budgets. But there are important differences from last year’s budget. Perhaps most significantly, the Administration has strengthened its rhetoric in favor of broader tax reform, just as the leaders of the congressional tax-writing committees have signaled a more concerted effort to pursue reform.
In this context, it is noteworthy that the Administration has continued to refrain from providing significant detail of how it might pursue tax reform. In some areas, however, the Administration’s budget reflects several detailed proposals. For example, the Administration has: (1) fleshed out the operation of the Buffet Rule, which would generally require households earning over $2 million per year to pay tax at a rate of at least 30 percent; (2) proposed a mark-to-market regime for derivatives contracts that would treat all gains and losses on such contracts as ordinary income/deductions; and (3) proposed subjecting debt purchased on the secondary market with a market discount to the original issue discount (OID) regime.
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Topics: Barack Obama, Federal Budget, International Tax Issues, Tax Incentives, Tax Planning, Tax Reform
Published In: Elections & Politics Updates, Energy & Utilities Updates, Finance & Banking Updates, International Trade Updates, Tax Updates
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