I just finished a post in which I said there was no word on the extenders bill and then I read an article in today’s CCH daily email Tax Newsletter under the title “Rangel to Introduce Major Tax Reform Legislation”. The Accountants World daily email headline newsletter also includes an article on the subject.
According to the CCH article, House Ways and Means Chairman Charles B. Rangel “plans to unveil sweeping tax reform legislation on October 25 [today!], setting the stage for the passage in 2008 of what he hopes will be the most significant change to the Internal Revenue Code since the Tax Reform Act of 1986.” This is Rangel’s promised "mother of all tax reforms".
Chuck promises this bill will "provide benefits to more than 90 million American families while also helping ensure that our companies remain competitive internationally."
The Tax Reduction and Reform Bill of 2007 would-
· Permanently eliminate the AMT beginning in 2008 (hurray!!!!).
· Expand the earned income tax credit, the standard deduction and the child tax credit.
· Lower the corporate tax rate to 30.5 percent.
The cost of the bill would be offset by a 4% “surtax” on supposed “upper income” taxpayers who have adjusted gross income of $150,000 for single taxpayers, and $200,000 for married taxpayers. The bill would also repeal the Code Sec. 199 manufacturing deduction and the last-in, first-out (LIFO) accounting method for valuing inventory.
CCH reports that “the bill may include legislation to provide a one-year patch for the AMT for 2007, as well as a one-year extension of the business tax breaks known as extenders that expire in 2007, according to the informal summary. Those provisions would be offset by provisions that affect carried interest, offshore hedge funds, securities firms and S corporations. Although the summary lists this as part of the reform bill, Rangel has said that he plans to introduce a separate, one-year AMT patch bill that would pass the House before adjournment in November”.
I will keep you up-to-date as more information becomes available.