A
domestic loss recharacterization rule should be instituted to
provide symmetry with the treatment of foreign losses.
The export source rule should be retained.
5)
Alternative Minimum Tax:
The alternative minimum tax, which is in
reality an accelerated income tax payment, is overly
burdensome and counterproductive.
It should be repealed and provision
should be made for the recovery of previously
advanced tax payments.
6)
Double Taxation of Dividends:
The double taxation of corporate earnings should be eliminated.
7)
Capital Gains:
There is no justification for treating individuals and
corporations differently in regard to capital gains and there
should be a significant exclusion for net capital gains for
corporations. In the
alternative, if there is no exclusion and corporate capital
gains in effect are treated and taxed as ordinary income,
fairness dictates that all net corporate capital losses should
be currently deductible.
General
Tax Policies
8)
“Corporate Welfare”:
The
term “corporate welfare” is misleading and should not be
used as an excuse for imposing tax increases on corporations.
All tax provisions should be judged on their merits and
not on a simplistic classification that ignores
underlying economic and tax policies.
9)
Business Expenses:
All ordinary and necessary business expenses should be currently
and fully deductible. No attempt should be
made to limit this general principle by aggressive and erroneous
application of the INDOPCO decision.
10) Estimated Payments:
Corporations should be allowed to make alternative estimated
payments based on
a set percentage of their prior year’s tax liability.
The objective is to simplify compliance for corporations
that have the greatest difficulty in estimating current
liabilities.
11) Retirement Income: Employer
sponsored voluntary retirement plans
significantly enhance the retirement security of employees
covered by such plans. Adoption
of retirement plans should be encouraged through the allowance
of more generous limits on contributions and benefits (including
appropriate adjustments for inflation) and simplification of the
exceedingly complex regulatory burdens which apply to these
arrangements. Contributions
to fund retirement benefits should continue to
be deductible currently and the tax deferral associated with the
inside buildup of plan earnings should be maintained.
12) Tax Compliance Costs: The
cost to American business to administer and comply with the
current corporate tax system is too high.
Congress should reduce the cost to both the government to
administer and taxpayers to comply in future tax legislation.
Future tax legislation should take into consideration tax
simplicity and the cost of compliance.
13) Interest Rate Differential on Tax
Refunds: Charging
higher rates of interest on tax deficiencies than those paid on
tax refunds is punitive and should be eliminated.
Toward this objective, the interest netting provisions of
the Internal Revenue Service Restructuring and Reform Act of
1998 should be applied in the most comprehensive manner
possible.
14) Penalties: Penalties under the tax code should not be used as
a means of raising revenue.
They should be based on sound tax policy, be narrowly
defined, be reasonable in relation to the tax involved, and not
apply when a taxpayer acted in a reasonable manner.
15) Taxation of Electronic Commerce: Tax
neutrality should be maintained between electronic and
non-electronic transactions.
Electronic commerce should not be subjected to
discriminatory new taxes. The
taxation of commerce conducted over the Internet should be
consistent with the established principles of international
taxation, including avoidance of double taxation.
16) IRS Audits:
IRS
Notice 98-31 contravenes the expressed objective of the IRS to
obtain the greatest possible number of agreements to tax
determinations at the lowest level by requiring examination
agents to impose Section 481 adjustments in every instance where
there is a disagreement over a timing issue.
Notice 98-31 should be withdrawn, and Section 481 should
be amended to preclude its application where a taxpayer is
required to capitalize expenditures which were previously
expensed.
17) Extraterritorial Income: The
U.S.
should
not negotiate changes in
U.S.
tax
law that would place
U.S.
taxpayers
at a disadvantage versus their foreign competitors. The
U.S.
should
pursue appropriate modifications to current agreements to
achieve this objective.
The
U.S.
should
continue to strongly defend against
foreign challenges to the extraterritorial income rules
and negotiate a satisfactory resolution of this dispute that
avoids trade-damaging retaliation.
18)
Corporate
Tax Shelters:
The
term "corporate tax shelters" should be limited to
specific, identifiable instances of abusive tax-motivated
transactions. The
term should not be used as a broad characterization of any
corporate business planning strategy that results in tax savings
- significant or not.
19)
Deficit
Reduction Fuel Taxes:
The 4.3 cent federal deficit reduction fuel tax collected
from railroads and barges should be repealed to address the
current inequity that exists among transportation modes.
