Tax Reform

The long-awaited Tax Reform Act (HR 1) was introduced — the day before the House adjourned — formalizing a comprehensive tax reform proposal first discussed by House Ways and Means Committee Chairman Dave Camp (R-MI) ten months ago. It also got the coveted bill number of "one." According to Chairman Camp:

At its core, the Tax Reform Act of 2014 is about making the tax code simpler and fairer for hardworking taxpayers. I believe every taxpayer should be able to do his or her taxes without fear that someone with better accountants or lawyers is getting a better deal. This legislation does that by ensuring that virtually all taxpayers would pay the least amount of taxes without having to keep track of every receipt and record and live in fear of an IRS audit. This legislation makes the Code more effective and efficient by getting rid of narrowly targeted provisions to lower tax rates across the board. This will enable small and large businesses alike to expand operations, hire new workers, and increase benefits and take-home pay."

• Tax Reform Act (HR 1)

  To amend the Internal Revenue Code of 1986 to provide for comprehensive tax reform. Flattens the code by reducing rates and collapsing today’s brackets into two brackets of 10 and 25 percent for virtually all taxable income, ensuring that over 99 percent of all taxpayers face maximum rates of 25 percent or less. Reduces the corporate rate to 25 percent. Increases the standard deduction. Taxes long-term capital gains and dividends as ordinary income, but exempts 40 percent of such income from tax. Repeals the Alternative Minimum Tax (AMT) for individuals. (Read more.)

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Chairman Camp is planning to retire at the end of the year, but we can expect that another Member of Congress will pick up this bill for re-introduction in the 114th Congress.