Senate Finance Committee Releases Comprehensive Tax Reform Report

Update provided by the Real Estate Roundtable

This morning, the Republican staff of the Senate Finance Committee released a 340-page report on comprehensive tax reform. While most of the report is descriptive of the problems in the tax code, as opposed to prescriptive, it does shed some light on the direction that the tax reform debate is likely to take in a Republican-controlled Senate.

It focuses heavily on the case for:

  • moving towards a more consumption-oriented tax base (more generous incentives for savings and investment)
  • enacting some form of corporate tax
  • addressing concerns caused by inequitable treatment of debt-financed earnings and equity-financed earnings at the corporate level
  • adopting a territorial tax system

It touches lightly on the case for consolidating pass-through regimes and seems to favor a more narrow approach that seeks to limit the disparate tax treatment of employees, depending on the type of pass-through entity that employs them.

The reports sets forth seven principles to guide tax reform.

The first three are adopted from President Reagan’s tax reform in the mid-1980s:

(1) efficiency and economic growth

(2) fairness, and

(3) simplicity

According to the authors, the four additional principles “are critical in today’s world”:

(4) revenue neutralit

(5) permanence

(6) competitiveness

(7) incentives for savings and investment

 

For more information as it becomes available, visit The Real Estate Roundtable

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Engineered Tax Services

Engineered Tax Services

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