S&C’s Tax Group launched Tax Reform Today, a blog focused on keeping clients and others informed of the proposals and possibilities of U.S. tax reform. The members of the Republican party in control—both in Congress and in the White House—have stated that tax reform is a legislative priority. But between the tax reform “Blueprint” proposed by House Republicans, the proposal made by President Trump during the election, and numerous other proposals (such as that by Senator Orrin Hatch, Chairman of the Senate Finance Committee), it can be difficult to get a handle on what all of the different concepts mean and which model, if any, is most likely to become law. In this blog, we hope to help clarify the subject of tax reform, to help our clients better understand the impact of proposals, and to collect and present the most relevant pieces of tax reform news going forward.
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Disclaimer Notice: Tax Reform Today is an informational product provided by Sullivan & Cromwell LLP and should not be considered a substitute for legal advice.
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U.S. Tax Reform: Tax-Exempt Organizations
February 7, 2018
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Tax Reform and State and Local Taxation: Initial New York State Reactions
January 22, 2018
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Don Korb and Andy Solomon on the Passage of Tax Reform
In an article published in the Tax Journal, Don Korb and Andy Solomon discuss how tax reform was passed, and lay out the most significant changes of the Tax Cuts and Jobs Act.
January 12, 2018 -
U.S. Tax Reform: Individual Taxation
January 8, 2018
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U.S. Tax Reform: Mergers and Acquisitions Considerations
January 2, 2018
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Summary of Key Amendments to Final Senate Tax Reform Bill
Late in the evening on December 1, the Senate passed their tax bill on a final vote of 51 to 49. Each Republican other than Senator Bob Corker (Tennessee) voted in favor of the bill, and each Democrat voted against the bill. The next step in the legislative process will be to reconcile this bill with the version passed by the House on November 16, which differs from the Senate bill in a number of significant ways. Both chambers are expected to vote this week to go to a conference committee to work out a final bill.
December 6, 2017 -
Don Korb and Andy Solomon on Tax Reform’s Swift Progress
In an article published in the Tax Journal, Don Korb and Andy Solomon discuss the rapid progress of the Republican tax reform effort, and assert that the stated goal of bill passage by Christmas is well within reach.
November 30, 2017 -
Tax Reform News Today – November 30, 2017
November 30, 2017
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Senate Budget Committee Votes to Approve Senate Tax Bill
On November 28, the Senate Budget Committee voted 12 to 11 to approve the Senate tax reform bill. Despite concerns that Republican Senators Bob Corker (Tenn.) and Ron Johnson (Wis.) might vote against the bill, every Republican on the Committee, including Senators Corker and Johnson, voted to approve the bill, while each Democrat voted against the bill.
November 28, 2017 -
Tax Reform News Today – November 27, 2017
November 27, 2017
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Tax Reform News Today – November 22, 2017
November 22, 2017
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Tax Reform News Today – November 20, 2017
November 20, 2017
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Notable Amendments to Chairman’s Mark of Senate Proposal
The Senate Finance Committee approved its version of the Tax Cuts and Jobs Act, passing the measure on a party-line vote. The final version of the bill that passed included an amendment from the Finance Committee Chairman, Senator Orrin Hatch, that included a few notable changes.
November 17, 2017 -
Tax Reform News Today – November 17, 2017
November 17, 2017
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Tax Reform News Today – November 16, 2017
November 16, 2017
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Highlights from Modified Senate Proposal
Last night, the Joint Committee on Taxation published amendments to the Senate’s proposal on tax reform. Consistent with the JCT’s release last week, this release was in the form of a description of the “Chairman’s Modification to the Chairman’s Mark of the Tax Cuts and Jobs Act.” See Sullivan & Cromwell LLP’s November 10, 2017 memorandum on the Senate proposal released last week.
November 15, 2017 -
Tax Reform News Today – November 13, 2017
November 13, 2017
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U.S. Tax Reform: Joint Committee on Taxation Releases Summary of Senate Finance Committee’s Tax Reform Plan
November 10, 2017
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Tax Reform Bill Proposes Significant Compensation Changes: Tax Reform Proposal Would Eliminate Nonqualified Deferred Compensation, Limit Deductions for Payments to Highly Compensated Officers and Restrict Compensation for Tax-Exempt Organizations
On November 2, 2017, the House of Representatives Ways and Means Committee released the first draft of its tax reform bill (the “Proposed Bill”). The Proposed Bill would make significant changes to the taxation of deferred compensation and would revise and increase the limitations on payments to highly compensated employees. However, other discussed changes to qualified plans such as “Rothification” or lowered limits on qualified plan contributions were not included.
November 3, 2017 -
U.S. Tax Reform—Insurance Company Provisions: House Ways and Means Committee Releases Draft Tax Reform Bill—Insurance Company Provisions
On November 2, 2017, Republicans in the House of Representatives unveiled the long-anticipated first draft of their tax reform bill, the “Tax Cuts and Jobs Act.” The draft bill includes provisions which would impact the taxation of life insurance companies and property and casualty insurance companies, and contains a proposal that could affect reinsurance transactions with foreign affiliates. Some important features of the draft legislation which are relevant to insurance companies are outlined in the attached memorandum.
November 3, 2017 -
U.S. Tax Reform: House Ways and Means Committee Releases Draft of Tax Reform Bill
Earlier today, Republicans in the House of Representatives unveiled the long-anticipated first draft of their tax reform bill. For the most part, the draft bill is consistent with the broad policy goals provided in the framework released by the “Big Six” on September 27, 2017. However, the language released earlier today provides some detail in a few areas that had previously been left open and diverges from the proposals in the framework in several key respects. Most of the proposed changes would become effective for years after 2017.
November 2, 2017 -
Potential Base Erosion Proposals
The framework for tax reform released by the “Big Six” includes “rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations.” This passage suggests that the eventual tax reform plan may include some sort of “global minimum tax”—an anti-avoidance measure under which all or targeted types of income of U.S. multinational corporations are taxed at a rate no lower than a designated floor rate. Although some have expressed concerns about such a plan, a global minimum tax represents a potential middle-ground between worldwide and territorial taxation systems, and has garnered some bipartisan support over the years.
October 25, 2017 -
Tax Reform News Today – October 17, 2017
October 17, 2017
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Tax Reform News Today – October 16, 2017
October 16, 2017
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Tax Reform News Today – October 12, 2017
October 12, 2017
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Tax Reform News Today – October 9, 2017
October 9, 2017
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Tax Reform News Today – October 6, 2017
October 6, 2017
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Tax Reform News Today – October 5, 2017
October 5, 2017
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Treasury Releases Report on Obama “Midnight” Regulations
On April 21, 2017, President Trump signed Executive Order 13789, authorizing the Treasury Department to determine if any significant tax regulations issued on or after January 1, 2016 should be altered or eliminated. On July 7, 2017, the IRS published Notice 2017-38, which identified certain regulations as targets for possible rescission or modification. On October 4, 2017, the Treasury Department released a report outlining certain actions that it believes would reduce the burden of certain regulations identified in the Notice. These actions include withdrawing some regulations completely, possibly revoking others in part, and possibly substantially revising others.
October 4, 2017 -
Tax Reform News Today – October 4, 2017
October 4, 2017
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Tax Reform News Today – October 2, 2017
October 2, 2017
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Tax Reform News Today – September 29, 2017
September 29, 2017
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Tax Reform Framework Released
September 27, 2017
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Tax Reform News Today – September 27, 2017
September 27, 2017
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Tax Reform News Today – September 25, 2017
September 25, 2017
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IRS Pilot Program for Section 355 Ruling Requests
September 21, 2017
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Tax Reform News Today – September 20, 2017
September 20, 2017
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Tax Reform News Today – September 15, 2017
September 15, 2017
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A Few Crumbs For Passthrough Taxation
In our April post on Passthrough Taxation, we discussed the broad policy proposals from President Trump and Congressional Republicans as they relate to the taxation of passthrough entities. Although the concept of a 25% tax on passthrough entities was available at the time, few details had been discussed or released. In a recent speech at the Delivering Alpha conference in New York, Treasury Secretary Mnuchin provided the first of any such details that have been made available by any of the “Big Six” or other members of the Trump Administration.
September 14, 2017 -
Tax Reform News Today – September 14, 2017
September 14, 2017
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Tax Reform News Today – September 13, 2017
September 13, 2017
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Tax Reform News Today – September 11, 2017
September 11, 2017
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Don Korb and Andy Solomon on Progress of Tax Reform and Future Hurdles
In an article written earlier this week and published in the Tax Journal, Don Korb and Andy Solomon examine the direction of tax reform and discuss some of the major hurdles going forward.
September 8, 2017 -
Tax Reform News Today – September 8, 2017
September 8, 2017
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Tax Reform News Today – September 5, 2017
September 5, 2017
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Tax Reform News Today – September 1, 2017
September 1, 2017
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Tax Reform News Today – August 31, 2017
August 31, 2017
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Tax Reform News Today – August 25, 2017
August 25, 2017
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Tax Reform News Today – August 23, 2017
August 23, 2017
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Tax Reform News Today – August 22, 2017
August 22, 2017
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Tax Reform News Today – August 18, 2017
August 18, 2017
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Tax Reform News Today – August 16, 2017
August 16, 2017
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Tax Reform News Today – August 14, 2017
August 14, 2017
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Tax Reform News Today – August 11, 2017
August 11, 2017
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Tax Reform News Today – August 10, 2017
August 10, 2017
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Tax Reform News Today – August 9, 2017
August 9, 2017
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Tax Reform’s Tangled Web: Beyond Policy Choices, Tax Reform Efforts Must Navigate Competing Priorities and Distractions on Capitol Hill
August 8, 2017
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Tax Reform News Today – August 8, 2017
August 8, 2017
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Tax Reform News Today – August 7, 2017
August 7, 2017
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Tax Reform News Today – August 4, 2017
August 4, 2017
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Tax Reform News Today – August 3, 2017
August 3, 2017
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Tax Reform News Today – August 2, 2017
August 2, 2017
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Tax Reform News Today – July 31, 2017
July 31, 2017
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IRS Releases Notice 2017-36, Extending 385 Documentation Requirement Effective Date by 1 Year to 1/1/2019
Treasury Department and IRS released a notice this afternoon providing that the effective date of the documentation requirements within the Section 385 regulations will be delayed by one year, to January 1, 2019. Section 385 regulations were finalized last October, and are within the scope of the “midnight regulations” that are under review by the Treasury Department and IRS. Many industry groups have expressed concern that the original effective date of documentation requirements (January 1, 2018) would have been too soon, in light of the significant amount of time and cost to properly comply with the regulations.
July 28, 2017 -
Tax Reform News Today – July 28, 2017
July 28, 2017
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The BAT Is Dead: The “Big Six” Releases Much Anticipated “Framework” on Tax Reform
July 27, 2017
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Tax Reform News Today – July 27, 2017
July 27, 2017
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Tax Reform News Today – July 26, 2017
July 26, 2017
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Tax Reform News Today – July 25, 2017
July 25, 2017
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Tax Reform News Today – July 24, 2017
July 24, 2017
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Tax Reform News Today – July 20, 2017
July 20, 2017
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Tax Reform News Today – July 19, 2017
July 19, 2017
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Tax Reform News Today – July 18, 2017
July 18, 2017
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Tax Reform News Today – July 14, 2017
July 14, 2017
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Tax Reform News Today – July 13, 2017
July 13, 2017
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Tax Reform News Today – July 11, 2017
July 11, 2017
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Tax Reform News Today – July 10, 2017
July 10, 2017
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Trump Administration Targets Certain of Obama’s “Midnight” Regulations
As outlined in a previous post, President Trump issued Executive Order 13789 on April 21, 2017, which was designed to reduce tax regulatory burdens. The order instructed Treasury Secretary Mnuchin to review all “significant tax regulations” issued on or after January 1, 2016, and to submit proposals to alleviate the burdens created by those regulations. On July 7, 2017, the IRS published Notice 2017-38, which lists all the regulations identified for possible rescission or modification.
July 7, 2017 -
Tax Reform News Today – July 7, 2017
July 7, 2017
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Tax Reform News Today – July 5, 2017
July 5, 2017
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Tax Reform News Today – July 3, 2017
July 3, 2017
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Tax Reform News Today – June 30, 2017
June 30, 2017
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Tax Reform News Today – June 29, 2017
June 29, 2017
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Tax Reform News Today – June 27, 2017
June 27, 2017
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Tax Reform News Today – June 26, 2017
June 26, 2017
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Tax Reform News Today – June 23, 2017
June 23, 2017 -
Tax Reform News Today – June 21, 2017
June 21, 2017
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Tax Reform News Today – June 19, 2017
June 19, 2017
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Tax Reform News Today – June 15, 2017
June 15, 2017
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Tax Reform News Today – June 14, 2017
June 14, 2017
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Tax Reform News Today – June 13, 2017
June 13, 2017
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Tax Reform News Today – June 12, 2017
June 12, 2017
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Tax Reform News Today – June 7, 2017
June 7, 2017
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Tax Reform News Today – June 5, 2017
June 5, 2017
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Tax Reform News Today – May 31, 2017
May 31, 2017
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Tax Reform News Today – May 30, 2017
May 30, 2017
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Tax Reform News Today – May 26, 2017
May 26, 2017
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Tax Reform News Today – May 25, 2017
May 25, 2017
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Tax Reform News Today – May 24, 2017
May 24, 2017
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Tax Reform News Today – May 23, 2017
May 23, 2017
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“Hatch-ing” a New Plan for Tax Reform
Senate Finance Committee Chairman Orrin Hatch has been expected to propose integrating the corporate and individual tax systems. Under his proposal, corporations would receive a deduction for any dividends distributed to shareholders, eliminating the two levels of tax on corporate income.
May 22, 2017 -
Tax Reform News Today – May 22, 2017
May 22, 2017
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Tax Reform News Today – May 19, 2017
May 19, 2017
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Tax Reform News Today – May 18, 2017
May 18, 2017
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Tax Reform News Today – May 17, 2017
May 17, 2017
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Tax Reform News Today – May 16, 2017
May 16, 2017
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Reviewing Obama’s “Midnight” Regulations—Another Inversion Wave?
A recent executive order from the Trump Administration authorized the Treasury Department to review all significant tax regulations issued on or after January 1, 2016. The executive order instructed the Secretary of the Treasury to find any regulations that go against certain stated tax goals of the Administration such as fairness and simplicity, and to recommend actions to mitigate such burdens. Many believe that the anti-inversion regulations promulgated under Section 7874 and the anti-earnings stripping rules under Section 385 are potential targets under this order.
May 15, 2017 -
Tax Reform News Today – May 15, 2017
May 15, 2017
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Tax Reform News Today – May 12, 2017
May 12, 2017
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Tax Reform News Today – May 11, 2017
May 11, 2017
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Tax Reform News Today – May 10, 2017
May 10, 2017
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Rethinking Repatriation
Under current law, earnings of foreign corporate subsidiaries of U.S. corporations are generally subject to U.S. taxation when the profits are actually or deemed to be “repatriated” to the United States (for example, the subsidiary pays a dividend to the U.S. parent). This has caused U.S. companies to keep an estimated $2.6 trillion of foreign earnings abroad, a problem which lawmakers have tried to solve in the past, for example, by instituting so-called “repatriation tax holidays.” To change our current system of international taxation—as congressional Republicans and the Trump Administration have both called for—any tax reform package will likely address foreign earnings abroad.
May 9, 2017 -
Tax Reform News Today – May 9, 2017
May 9, 2017
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Tax Reform News Today – May 8, 2017
May 8, 2017
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Don Korb and Andy Solomon on the State of U.S. Tax Reform
In an article written earlier this week and published in the Tax Journal, Don Korb and Andy Solomon analyze the current state of tax reform efforts and the alternatives moving forward.
May 5, 2017 -
Tax Reform News Today – May 5, 2017
May 5, 2017
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Tax Reform News Today – May 4, 2017
May 4, 2017
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Tax Reform News Today – May 3, 2017
May 3, 2017
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Tax Reform News Today – May 2, 2017
May 2, 2017
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Estate and Gift Taxes
Proposals for tax reform include repeal of the estate tax, which introduces new questions for how assets will be transferred, either inter vivos or at death.
May 1, 2017 -
Tax Reform News Today – May 1, 2017
May 1, 2017
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Tax Reform News Today – April 28, 2017
April 28, 2017
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Tax Reform News Today – April 27, 2017
April 27, 2017
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Trump Tax Plan Announced
April 26, 2017
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Tax Reform News Today – April 26, 2017
April 26, 2017
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JCT puts up hurdle to tax cut without revenue offset
April 25, 2017
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Tax Reform News Today – April 25, 2017
April 25, 2017
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Tax Reform News Today – April 24, 2017
April 24, 2017
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Passthrough Taxation
Proposals for tax reform raise a number of significant questions for the future and operation of passthrough entities such as limited partnerships, LLCs treated as partnerships, and S Corporations.
April 24, 2017 -
Tax Reform News Today – April 21, 2017
April 21, 2017
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Cutting Corporate Tax Rates
A significant drop in the headline rate for corporations has been proposed, but the tax corporations ultimately pay will depend on the corporate tax base.
April 21, 2017 -
Tax Reform News Today – April 20, 2017
April 20, 2017
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Transition Rules
A move from the current income tax regime to the proposed destination based cash-flow tax (DBCFT) could create significant dislocation and economic disruption.
April 20, 2017 -
Don Korb and Andy Solomon on the Direction of U.S. Tax Policy
In an article published by Tax Journal in November 2016, Don Korb and Andy Solomon present the framework for U.S. tax reform following the 2016 election cycle.
April 19, 2017 -
Tax Reform News Today – April 19, 2017
April 19, 2017
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The Fuss about Border Adjustments
One of the central features of the GOP’s Blueprint is a “border adjustable” tax that has raised questions from taxpayers, tax practitioners, academics and foreign sovereigns.
April 18, 2017 -
Cash Flow Tax
The GOP’s Blueprint proposes a fundamental change to the taxation of business income, where the tax base would be determined by the cash flow of a business, and not necessarily by its profits.
April 18, 2017 -
No Time Like the Present for Capital Expenditures
Immediate expensing of the cost for capital expenditures potentially simplifies the operation of a business, however, transition rules will impact the effect of this proposal.
April 18, 2017 -
The End of an Era for Interest Deductibility
Without deductibility of interest, as has been proposed, businesses will be forced to re-evaluate the structure of their capital and operations. There may be planning opportunities in advance of tax reform, however these opportunities will largely depend on the effect of transition rules.
April 18, 2017 -
David Hariton on Border Adjustments
In a recent article in Tax Notes (available here), Sullivan & Cromwell Tax Partner David Hariton argues that a border adjustment regime would create the need for as much complexity as the proposal would eliminate.
April 18, 2017 -
Will Border Adjustments Cause Exchange Rates to Adjust? Expert Says No.
As discussed in our post on Border Adjustments (available here), some have argued that border adjustments would not actually hurt net importers and benefit net exporters, because of offsetting currency adjustments. Kenneth Rogoff, a former chief economist of the IMF and a professor of economics and public policy at Harvard University, argued that currencies might not adjust as fully or as quickly as many predict they will.
April 18, 2017 -
David Hariton on Application of DBCFT to Financial Transactions
In a recent publication in Tax Notes (available here), Sullivan & Cromwell Tax Partner David Hariton explains that there are three possible ways that the DBCFT could tax financial transactions.
April 18, 2017