President Obama to Unveil FY 2016 Budget
Later today, President Obama is set to unveil his FY 2016 Budget (Budget). We anticipate that the Budget will include various proposals previewed in President Obama’s State of the Union Address. Squire Patton Boggs will release a comprehensive Budget analysis in the days following.
Senate Finance Democrats Write Letter to Hatch on Tax Reform
As lawmakers prepare to advance tax reform efforts, Senate Finance Democrats last week sent a letter to Chairman Orrin Hatch (R-UT) arguing that tax reform should be done through regular order and not reconciliation. Moreover, they urged Chairman Hatch to ensure that the tax reform process accounts for fairness, progressiveness, transparency, certainty, U.S. job creation and competitiveness, debt reduction, and base-broadening.
Lawmakers Consider Infrastructure Funding, Likely to Mark-Up Tax Extenders
Last week, Senators Rand Paul (R-KY) and Barbara Boxer (D-CA) introduced legislation that would fund the Highway Trust Fund with revenue generated from a 6.5 percent tax on repatriated earnings. While the proposal initially saw support as an alternative to proposals calling for a gas tax hike, opposition to the legislation by Chairman Hatch and Senate Environment and Public Works Committee Chairman Jim Inhofe (R-IA) has called its future into question.
A similar proposal introduced last week by Representative John Delaney (D-MD) would tax repatriated earnings at a rate of 8.75 percent and use the revenue to fund the Highway Trust Fund, while also imposing an 18-month deadline for international tax reform or triggering a fallback plan that would raise taxes on companies using “tax havens.” However, given the opposition by Chairmen Hatch and Inhofe, the proposal’s future is similarly uncertain.
This week, the House Ways and Means Committee is likely to hold a markup of legislation to make permanent seven expired tax provisions, including section 179 business expensing. Anticipating that these provisions will be successfully reported out of committee, the full House has scheduled a vote on the legislation for the second week in February.
This Week’s Hearings:
- Tuesday, February 3: The House Ways and Means Committee will hold a hearing to discuss President Obama’s Budget.
- Tuesday, February 3: The Senate Budget Committee will hold a hearing to discuss President Obama’s Budget.
- Tuesday, February 3: The Senate Finance Committee will hold a hearing titled “Internal Revenue Service Operations and the President’s Budget for Fiscal Year 2016.” The witness will be the Honorable Sylvia Mathews Burwell, Secretary, U.S. Department of Health and Human Services.
- Wednesday, February 4: The Senate Finance Committee will hold a hearing titled “The President’s Budget for Fiscal Year 2016.”
- Wednesday, February 4: The House Budget Committee will hold a hearing tilted “The President’s Fiscal Year 2016 Budget.”
- Thursday, February 5: The Senate Finance Committee will hold a hearing titled “The President’s Budget for Fiscal Year 2016.” The witness will be the Honorable Jacob J. Lew, Secretary, U.S. Department of the Treasury
Treasury Unclear on Timing of Inversion Regulations, IRS Updates Priority Guidance Plan
Last week, after being questioned on when the Administration plans to issue regulations implementing its September 2014 guidance aimed at curbing corporate inversion transactions, the Department of the Treasury indicated that it “can’t say any more on timing than what was in the notice.”
Separately, the Internal Revenue Service (IRS) last week issued updates to its 2015 Priority Guidance Plan, adding 11 new projects to its list of priorities. The plan provides guidance on a variety of issues important to individuals and businesses, including international taxation, health care, and implementation of legislative changes.