A survey of leading corporate tax executives predicts that taxes will not be a major issue in Congress in 2008, apart from the one-year alternative minimum tax patch and the one-year extenders package.
Respondents to the survey, conducted by law firm Miller & Chevalier, want greater tax simplification, a lower corporate tax rate and international tax policies that will help them stay more competitive globally.
They named management of the effective tax rate (28 percent) and FIN 48 issues (21 percent) as two of their top business tax concerns in 2008. In addition, 68 percent believe Congress is likely to increase taxation of hedge funds and other investment vehicles, 63 percent foresee codification of the economic substance doctrine, and 59 percent believe Congress will increase the taxation of international operations.
Eighty-four percent see the one-year AMT patch and 68 percent expect the one-year tax extenders package to be the most likely pieces of tax legislation coming out this year.
“Not surprisingly, from the short-term perspective, it confirms the view that there is not going to be a lot of significant tax legislation this year,” said Marc Gerson, a partner at Miller & Chevalier and former majority tax counsel to the House Ways and Means Committee. “There will be a lot of focus on extending the current AMT patch and the business extenders package, but outside of that there won’t be any significant tax legislation for the year, which is what people are anticipating. People realize there will be at some point fundamental reform of the tax system. There will be a lot of hearings and discussions about tax reform for the long term. We see it as an interesting snapshot of what the year is going to look like.”
The survey, however, seems to have overlooked the economic stimulus package with its tax rebates, and the extension of the Bush tax cuts in the recently released budget plan, which are certainly provoking discussion on Capitol Hill.
Survey respondents were also asked about their perceptions of the presidential hopefuls. They viewed Mitt Romney as having the most favorable tax policy toward business income, while Hillary Clinton and former candidate John Edwards were seen as least favorable.
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