Last week, the House of Representatives passed H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012, aimed at providing a clear process for tax reform in 2013, by a vote of 232-189. It requires a reform bill be introduced by April 30, 2013 that consolidates the current six income tax brackets to two brackets (of 10 percent and not more than 25 percent), reduces the corporate tax rate to not greater than 25 percent, repeals the Alternative Minimum Tax, broadens the tax base to maintain revenue at between 18 and 19 percent of the economy and changes the structure to a territorial system. In such a system, companies would not pay taxes on profits earned overseas.
Senate Committee Approves Tax Extenders Bill
Last Thursday, the Senate Finance Committee passed tax extenders legislation by a vote of 19–5. The Family and Business Tax Cut Certainty Act of 2012 would reinstate many tax provisions that expired at the end of 2011 and other provisions that are set to expire at the end of 2012. Included in the bill was a two–year extension of the 15–year depreciation of leasehold improvements for 2012 and 2013. In an effort to reduce the number of provisions perceived to be unnecessary, the Finance Committee eliminated 25 percent of the measures under consideration. Action by the full Senate could come in September, while the House most likely will not address similar legislation until after the election.
House and Senate Pass Competing Tax Legislation
Prior to adjourning for the August recess, the House and Senate passed politically-charged tax legislation that will be used as a rhetorical dividing line between Republicans and Democrats during the remainder of the campaign season. The legislation in each chamber focused primarily on the expiring tax provisions known colloquially as “the Bush tax cuts.” The Senate’s legislation would provide a one–year extension of those provisions for single filers making less than $200,000 and joint filers making less than $250,000. The Democratic majority passed the bill 51–48. Meanwhile, the Republican plan, which would extend these rates for everyone, was defeated 45–54. In the House, Republicans passed a bill similar to the Senate Republican substitute by a vote of 256–171. Both bills included a one-year extension of the 15-percent tax rate on capital gains; however, the Republican proposals apply the rate to all regardless of income. Congress is not expected to reconcile their differences on these or any other tax issues until after the November elections.
New Voting System Implemented at ICC Hearings
The International Code Council (ICC) instituted a new electronic voting designation system to be used at the final code hearings during the upcoming annual ICC meeting in October. The new system allows voting members to watch the hearings on the Internet and vote electronically from a remote location. This system will increase the number of votes for each of the code change proposals and will insure more activity at the hearings regardless of where they are being held. These changes will require BOMA to become even more active in the various regions to assist in gathering support from the voting members for those proposals that could benefit our industry.