A bridge to tax reform
As 2015 came to a close, NRCA scored key victories on a number of tax priorities with the passage of the Protecting Americans from Tax Hikes (PATH) Act. For years, business owners relied on Congress to periodically renew a package of tax provisions, but lawmakers constantly were waiting until the eleventh hour to pass them. Thankfully, business owners have now gained some certainty with a number of tax provisions being made permanent or extended for five years.
A perennial problem
NRCA had hoped the provisions in the PATH Act would be addressed in the context of comprehensive, permanent tax reform. With many of the provisions made permanent, the baseline budget figure will be reduced when Congress goes on to address reforming the entire tax code, possibly in 2017. Republicans would like to pass a revenue-neutral tax reform package, which means the U.S. Treasury would take in the same amount of revenue it currently does while simplifying the tax code. Democrats would like to see tax increases on the wealthiest taxpayers to help reduce the national debt.
Attempts to reform the tax code have been made in recent years, but the partisan divide between Democrats and Republicans has proved impossible to overcome. Some politicians have suggested taking a step-by-step approach that would address different segments of the code in hopes a bipartisan agreement can be made. Both sides agree the tax code is globally uncompetitive, which has led to a number of U.S. companies seeking to move their headquarters overseas to take advantage of lower tax rates. These "inversions" have led lawmakers to seek ways to reform the international portion of the tax code, and the topic will be the focus of reform efforts in 2016.
Register now for free access
- Full access to every article
- Online Web exclusive information
- Photo gallery
- Breaking news
- Online classified ads