On August 2nd, President Obama quickly signed the Budget Control Act after passed by the Senate 74 to 26. The House had passed the Budget Control Act on August 1st by a vote of 269 to 161. The new law raises the debt limit to avoid a projected August 2nd default and creates a bipartisan joint select committee on deficit reduction.
At press time, it is unclear what changes to the Tax Code may be addressed by the joint select committee on deficit reduction. The joint committee’s mandate under the new law requires it to draft additional deficit reduction legislation in time to be voted on by Congress before year end.
In recent months, tax proposals from both side of the aisle raised as part of the debate leading up to the passage of the new law have included bold, sweeping tax proposals, as well as more limited loop-hole-closing recommendations. All these proposals remain on the table for consideration by the joint committee as it begins work shortly.
The attached report will also discuss the following highlights:
- Tax reform linked to deficit reduction
- Fate of Bush-era tax cuts unclear
- AMT proposed to be abolished
- Corporate tax preferences under fire
- Lower corporate tax rate possible