ey-global-tax-policy-outlook-for-2015

United States
2.4 Tax policy outlook for 2015 — detail
Corporate income taxes
Tax reform
• Tax reform. The chairmen of the congressional tax-writing
Hatch of Utah, support comprehensive tax reform (covering
both businesses and individuals) that lowers tax rates and
business tax reform that would be revenue neutral in
the long-run (combining revenue raising provisions with
incentives that cost money). While far apart in the details,
business tax reform should be a priority this year.
• The Administration’s FY 2016 budget, released 2 February
2015, like prior budgets, contains a reserve fund for
business tax reform. While many of the provisions are
carryover items, meaning they have been included in past
budgets, the Administration included some new proposals
that are generating discussion. Among them are a proposed
one-time 14% transition tax on untaxed foreign earnings
of US companies, and a proposed minimum 19% tax on
US companies’ foreign earnings going forward. Under
the Administration’s proposal, the revenue from the onetime
transition tax would be devoted to infrastructure
investments.
•
to support “middle-class economics.” It contains proposals
that would raise the top capital gains and dividend tax
and increase taxes on high-income taxpayers. Revenue
from these changes would then be used toward tax policies
intended to help the middle class.
•
Administration, it is important to note that it is not a
legislative proposal. Legislation would still need to be
enacted through the legislative process for these policies
to come into effect. And as many of these proposals have
received a cool reception from congressional Republicans,
it remains to be seen whether these provisions could gain
traction in the current Congress.
• Meanwhile, Senate Finance Committee Chairman Hatch
explore different policy areas, with the intent of introducing
and considering a tax reform bill this year. Sen. Hatch
has said tax reform is necessary and should encourage
job creation and economic growth, make the tax system
more internationally competitive, and lower rates. Finance
principles, which include increased progressivity and a
narrowing of the disparity between the taxation of capital
and wage income. For his part, House Ways and Means
Committee Chairman Ryan has said Republican control of
the Senate would lead to “a very bold effort” on tax reform.
Chairman Ryan has also said he planned to put tax reform on
a fast track in his committee. However, political differences
regarding the scope of tax reform and the revenue
parameters of such legislation may delay action.
Tax extenders
•
end of 2013. These include major corporate items such as
last acts of 2014, Congress extended virtually all of these
provisions, but only through 2014. Lawmakers are expected
to revisit these issues in 2015.
Taxes on wages and employment
• Under the Affordable Care Act (ACA), beginning in 2015,
“large employers” are subject to excise taxes, which are
generally imposed if the employer does not offer a certain
level of health care coverage to its full-time employees,
and those employees purchase coverage through a health
insurance exchange and receive a premium tax credit. Also
to meet new and expansive health insurance information
reporting requirements.
• The US Supreme Court’s 2013 decision in Windsor holding
gender couple has resulted in numerous states overturning
their bans on same-gender marriage. The result has been
gender spouse. The Supreme Court in January said it
would rule on two questions later this year — whether the
Fourteenth Amendment requires states to license marriages
between same-gender couples, and whether it requires
states to recognize same-gender marriages licensed and
performed in other states, and the Court’s ruling could have
further implications in this area.
•
increased their focus on whether employers are improperly
treating their workers as independent contractors rather
than employees for tax purposes. The courts showed a
employees. These events are challenging employers to
review the status of their independent contractors.
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