A blog post

The President’s Budget Tax Proposals

Posted on the 16 February, 2012 at 2:35 pm Written by in Taxes

The President delivered his proposed budget for fiscal year 2013 this Monday. The budget included as one of its five tax “reform” principles the following:

  • Simplify the Internal Revenue Code

Sounds good. Here are some proposed tax “simplifications”:

  • Provide a temporary 10% tax credit for new jobs and wage increases
  • Provide additional tax credits for investment in advanced energy manufacturing
  • Provide tax credit for energy-efficient commercial building property expenditures
  • Reform and extend Build America Bonds
  • Provide for automatic enrollment in IRAs, including a small-employer tax credit
  • Expand the earned income tax credit for larger families
  • Expand the child and dependent care tax credit
  • Provide tax incentives for locating jobs and business activity in the United States
  • Provide new manufacturing communities tax credit
  • Target the domestic production deduction to domestic manufacturing activities
  • Provide a tax credit for the production of advanced technology vehicles
  • Provide a tax credit for medium- and heavy-duty alternative-fuel commercial vehicles
  • Modify certain energy incentives
  • Eliminate capital gains taxation on investments in small business stock
  • Expand the tax credit provided to qualified small employers for nonelective contributions to employee health insurance
  • Extend and modify the new markets tax credit
  • Designate growth zones
  • Provide tax incentives for transportation infrastructure
  • Modify tax-exempt bonds for Indian tribal governments
  • Allow current refundings of state and local governmental bonds
  • Reform and expand the low-income housing tax credit
  • Defer deduction of interest expense related to deferred income of foreign subsidiaries
  • Determine the foreign tax credit on a pooling basis
  • Tax currently excess returns associated with transfers of intangibles offshore
  • Limit shifting of income through intangible property transfers
  • Disallow the deduction for nontaxed reinsurance premiums paid to affiliates
  • Limit earnings stripping by expatriated entities
  • Modify tax rules for dual capacity taxpayers
  • Tax gain from the sale of a partnership interest on a lookthrough basis
  • Prevent use of leveraged distributions from related foreign corporations to avoid dividend treatment
  • Extend Sec. 338(h)(16) to certain asset acquisitions
  • Remove foreign taxes from a Sec. 902 corporation’s foreign tax pool when earnings are eliminated
  • Require a certified taxpayer identification number (TIN) from contractors and allow withholding if the contractor does not provide a TIN
  • Require e-filing by any entity that must file Schedule M-3
  • Authorize Treasury to require additional information to be included in Form 5500, Annual Return/Report of Employee Benefit Plan
  • Allow the IRS to require prospective reclassification of misclassified workers
  • Extend the statute of limitation where a state adjustment affects federal tax liability
  • Require taxpayers who prepare their returns electronically but file their returns on paper to print a 2D bar code
  • Impose a penalty on failure to comply with electronic filing requirements

Don’t worry too much about this. The Senate hasn’t passed a budget in years.