March 21, 2013
Hatch Tax Amendments to Senate Democrats’ Budget for Fiscal Year (FY) 2014
TO: Reporters and Editors
FROM: Antonia Ferrier and Julia Lawless for Senate Finance Committee Ranking Member Orrin
RE: Hatch Tax Amendments to Senate Democrats’ Budget for Fiscal Year (FY) 2014
DATE: Thursday, March 21, 2013
As the Senate begins to debate Democrats first budget blueprint in nearly four years, Senate Finance Committee Ranking Member Orrin Hatch (R-Utah) today filed the following tax related amendments to S.Con.Res. 8, the Senate Budget Resolution for FY 2014:
TAX RELATED AMENDMENTS:
- Prevent the President’s proposed 28 percent limitation on itemized deductions:This amendment would reduce the tax revenue number in Murray’s number by $423 billion, to insure that the President’s proposed 28 percent cap on deductions for certain taxpayers, including small business owners, does not become part of any tax hikes. The $423 billion reduction in revenues in the budget would correspond to the amount of revenue that the Joint Committee on Taxation (JCT) projects could be raised by the President’s proposed 28 percent cap.
The amendment’s purpose is to protect charitable organizations, homeowners with mortgages, state and local taxpayers, retirement plan participants, and other taxpayers from facing reduced deductions in order to raise federal revenue to be used for spending. The amendment does not preclude consideration of scaling back those deductions, should policymakers choose to do so, in attempts to engage in revenue-neutral tax reform involving base broadening and lowering of tax rates.
- Amendment protecting the Research and Development tax credit from being reduced in order to generate revenue for more spending:This amendment would reduce Murray’s tax revenue amounts by the amount ($105.9 billion over 10 years) necessary to preserve and make permanent the research and development (R&D) tax credit. It would prevent using reductions in the credit, under the guise of “closing loopholes,” to generate more federal revenue to finance more federal spending.
- An amendment to provide for pro-growth, revenue-neutral individual tax reform:This amendment strikes the tax reconciliation instructions and protects Americans from Murray’s proposed trillion dollar tax hike. Specifically, it provides for revenue-neutral individual tax reform that would lower rates and make the tax system simpler and more efficient for individuals and small businesses.
- An amendment to provide for pro-growth, revenue-neutral competitive international business tax reform: This amendment to the proposed budget resolution calls for revenue-neutral tax reform by striking reconciliation instructions and creating a Deficit Neutral Reserve Fund (DNRF) for the revision of the Internal Revenue Code of 1986 so as to create more efficient tax law for businesses, leading to a more competitive international business environment for United States enterprises. Under current law, US-based international corporations are put at a competitive disadvantage in that they are taxed on their worldwide income, whereas many foreign countries only tax their corporations based on the income arising in such foreign country.
- Deficit Neutral Reserve Fund (DNRF): Permits the Budget Chairman to adjust the committee spending allocations to account for future legislation that may be considered in the Senate. If legislation comes to the floor that satisfies the description in the DNRF (as determined by the Budget Chairman), the Budget Chairman may change spending allocations to prevent the legislation from triggering a budget point of order.