Pardon Our Dust
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NUMBER OF THE WEEK: $156 Billion.The total of inbound cross-border acquisitions of U.S. firms since the U.S. Treasury announced its anti-inversion measures last fall. The latest figurereflects a $50 billion jump from last year’s total according to a news report from theFinancial Times. Some of the biggest foreign buyers are from lower-tax jurisdictions such as Canada and Ireland. The United States’ 35-percent corporatetax rate remains the highest among industrialized nations.
Enzi and Durbin Introduce Online Sales Tax Legislation. Senators Mike Enzi (R-WY) and Dick Durbin (D-IL) have introduced an updated version of the Marketplace Fairness Act, which would allow states to collectonline sales tax from out-of-state businesses. Similar to the 2013 Senate-passed bill (S.743), the 2015 bill ( S.698) has garnered earlybipartisan support. Though full text of the bill is not yet available, the revised legislation may include a one-year delay in implementation and exemptionfor sales made during the fall/winter holidays for the first year.
It’s Budget Week! The House and Senate budget chairmen are unveiling and marking up their budget blueprints for fiscal year 2016 this week. There had been speculation aboutwhether the GOP would include instructions for using the controversial budget procedure known as reconciliation in their budget resolutions to movecomprehensive tax reform, but Senate Finance Chairman Orrin Hatch (R-UT) recently dismissed such a move in public statements. Instead, it appears likelythat reconciliation instructions will be vague enough to allow Republican lawmakers flexibility to dismantle and perhaps replace Obamacare depending on theoutcome of King v. Burwell, the Supreme Court case challenging the legality of using Obamacare insurance tax credits for purchasing health coveragefrom the federal exchange.
We also expect the House and Senate budget resolutions to lack both specifics and revenue raisers (read: tax increases), the latter of which would goagainst the Republican ethos, despite the deep spending cuts that would be needed with no additional revenue to help balance the budget within 10 years(another Republican promise).
Just one problem: in order to use reconciliation down the road, the House and Senate must first agree on and pass budget resolutions. This will not be easygiven the increasing divisions among factions of Republican lawmakers. But a shot at dismantling Obamacare could be just the carrot needed to unifyRepublicans.
JCT Releases Estimates for the President’s FY 2016 Revenue Provisions. Speaking of the federal budget, the Joint Committee on Taxation has published its own estimates for the revenue provisions under President Obama’s budget proposal for fiscal year 2016. We read the report, so you don’t have to. Below is a comparison of the estimates provided by the Office of Management and Budget and ones provided by the JCT.