On February 26, 2014, House Ways and Means Chairman Dave Camp (R-MI) released a draft “Tax Reform Act of 2014” that provides for significant changes in the U.S. tax system. Chairman Camp indicated that he had three primary objectives in the reform proposal, including:
- Simplifying the Tax Code;
- Lowering income tax rates for individuals, families and all businesses; and
- Making the Tax Code fairer and more accountable.
Chairman Camp stated “Tax reform needs to be about strengthening the economy and making the Code simpler and fairer. That’s what Republican President Ronald Reagan did when he worked with Democrats in Congress in 1986. We need to get to work and repeat that success.”
Highlights of the proposal include:
- Individual income tax brackets would be consolidated and simplified from the current seven brackets – ranging from 10% to 39.6% – to only three brackets of 10%, 25%, and 35%;
- A phased-in reduction of corporate tax rates from 35% to 25% by the year 2019;
- The repeal of the alternative minimum tax (AMT) for both individuals and corporations; and
- The repeal of favorable tax treatment for “carried interest” of partnerships, typically in a private equity fund.
The text of the entire draft can be found here: http://waysandmeans.house.gov/uploadedfiles/ways_and_means_section_by_section_summary_final_022614.pdf
Whether Chairman Camp has success in his reform efforts remains to be seen, especially in an election year, however, the reform proposal has provisions that would impact every individual and business in the U.S. If you would like additional information on any of the specific provisions included in the “Tax Reform Act of 2014”, please don't hesitate to contact me in our Tampa, FL office, subscribe to my blog or contact any of the Skoda Minotti tax professionals.
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