Tax Day 2013 is here!
Our coalition partner, American's for Tax Fairness, is getting the word out about tax day events and keeping the heat on corporate tax dodgers. (And some of our friends put together a nifty little game, Tax Evaders, that you ought to check out and share.)
Looking ahead, the House of Representatives, Senate and President have all put forward budgets for 2014 that represent three differing visions of how the federal government should raise revenue in the years ahead. All sides are doing their best to appear willing to compromise, but before a unified budget is passed, House Republicans, Senate Democrats and the Administration will all have to agree on the specifics. In other words, it’s unlikely that anything will happen soon.
Meanwhile, Senator Max Baucus (D, Montana) and Representative Dave Camp (R, Michigan) - the two top tax policy legislators in the Senate and House respectively - have also announced their earnest intention to address major tax reform. If they are successful, it will be the first comprehensive overhaul of the tax code since Ronald Reagan's effort with congressional Democrats in 1986.
The tax reform effort from Baucus and Camp (along with members of their committees - Senator Orin Hatch (R, Utah) in particular) is scheduled to be drafted over the next several months, before being released in August, just before Congress returns from its summer recess. Their tax overhaul is likely to come before the full Congress in September, just when budget negotiations might be truly heating up (fiscal year 2014 starts on October 1, so a budget or continuing resolution must be passed by the end of September to avoid a government shutdown). We're keeping our focus on the upcoming battle over tax reform, and on the estate tax.
The budget that the President put forward has appropriately received a lot of criticism both for not raising enough new tax revenue and for proposing cuts to Social Security and Medicare benefits. One positive aspect of the budget proposal from the Obama Administration is that it calls for an increase in the estate tax. Specifically, here's an excerpt from page 18 of the offical Administration budget (PDF):
Return Estate Tax to 2009 Parameters and Close Estate Tax Loopholes. The Budget returns the estate tax exemption and rates to 2009 levels beginning in 2018. Under 2009 law, only the wealthiest 3 in 1,000 people who die would owe any estate tax. As part of the end-of-year “fiscal cliff” agreement, congressional Republicans insisted on permanently cutting the estate tax below those levels, providing tax cuts averaging $1 million per estate to the very wealthiest Americans. [The Budget] would also eliminate a number of loopholes that currently allow wealthy individuals to use sophisticated tax planning to reduce their estate tax liability. These proposals would raise $79 billion over 10 years.
All other questions about the budget aside, it's good news that the President is proposing positive changes to the estate tax. There is more revenue to be had with a stronger proposal, and we'll be working with our partners and allies to get the strongest possible estate tax included in any federal budget or comprehensive tax reform package.