Senate Finance Committee Contemplates the Repeal  of All Special Expenditure Provisions Senate Finance Committee Contemplates the Repeal  of All Special Expenditure Provisions

Senate Finance Committee Contemplates the Repeal of All Special Expenditure Provisions

On June 27, 2013, Senate Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) proposed to begin the formal legislative process on tax reform by eliminating all special tax expenditure provisions. Some of the most significant special tax expenditures[1] that could be eliminated include:

  • preferential rates on long-term capital gains and qualifying dividend income
  • research and development credit or expensing
  • exclusion of interest on public purpose state and local government debts
  • credit for low-income housing
  • exclusion of benefits provided under cafeteria plans
  • exclusion of employer contributions for health care, health insurance premiums, and long-term care insurance premiums
This "blank slate" approach proposed will have a drastic impact on all individuals and businesses. The Dear Colleague letter[2] released by Senators Baucus and Hatch requests senators provide comments to the committee by July 26, 2013, detailing proposals for the maintenance of certain special tax expenditure provisions. Absent a request for retention, there is an increased risk that the so called "special expenditure provision" may be unavailable in the future.
 
Ice Miller's Tax Group and our affiliate Ice Miller Strategies can assist you in safeguarding those provisions most relevant to you or your business.  Ice Miller Strategies has extensive experience working with members of Congress, and our principal, Thomas Lynch, recently served as a staff director for Sen. Baucus.  For more information about the Dear Colleagues letter, please contact Thomas F. Schnellenberger, Jr., partner in the Tax Group, at (317) 236-5886 or thomas.schnellenberger@icemiller.com or Thomas Lynch, principal with Ice Miller Strategies, at (202) 824-8662 or thomas.lynch@icemiller.com.
 
 
This publication is intended for general information purposes only and does not and is not intended to constitute legal or tax advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
 
 
 


[1] A complete list of these special tax provisions as defined by the non-partisan Joint Committee on Taxation can be found here.
[2] Next Steps on Tax Reform, Chairman Max Baucus and Ranking Member Orrin Hatch, U.S. Senate Committee on Finance (June 27, 2013), available here.
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