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alliantgroup tax experts weigh in on corporate tax reform issues to stand up for small and medium businesses

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CFO.com, 2/22/12
Will Corporate Tax Reform Squeeze Small Companies?
The Treasury Department released a framework for corporate tax reform that would lower the corporate rate to 28% and remove many tax incentives, including subsidies for oil and gas companies. Treasury also proposed simplifying and making permanent the research-and-development tax credit and providing incentives for clean energy and manufacturing.
Some parts of this plan could actually hurt smaller companies. Lowering the corporate tax rate and removing tax incentives without also cutting the individual tax rate would favor large C corporations over “pass-through entities” (typically small and medium-sized businesses organized as limited liability companies or S corporations) that pay the individual tax rate rather than the corporate rate.
“What a small or medium business is in the real world is very different from how policymakers like to think of it in D.C.,” says Dean Zerbe, National Managing Director at alliantgroup and former Senior Tax Counsel to the U.S. Senate Committee on Finance. “They're really talking about mom-and-pop shops. Less than $10 million in sales is a pretty small business. I think Congress is going to be very uncomfortable with saying, ‘Let's raise taxes on these small and medium businesses and then use that money to effectively lower taxes for the Fortune 500.'”
Zerbe applauds other aspects of the proposal, including its focus on reducing debt financing and on incentivizing manufacturing.
Read the entire article here.
Accounting Today, 2/22/12
Obama Proposes Business Tax Reforms
The Obama administration unveiled a set of proposals for business tax reform aimed at lowering the corporate tax rate to 28 percent from a high of 35 percent, while eliminating dozens of tax loopholes and subsidies.
The President's Framework for Business Tax Reform, which was jointly released by the White House and the Treasury Department, calls for refocusing the manufacturing deduction and using the savings to reduce the effective rate on manufacturing to no more than 25 percent, while encouraging greater research and development and the production of clean energy.
“They're going to expand the Section 199 deduction and double it for companies doing advanced technologies,” said alliantgroup National Managing Director Dean Zerbe, former Senior Tax Counsel to the Senate Finance Committee, in an interview. He believes the administration's proposals will probably prompt the Republican nominees to tighten up their own economic proposals.
Read the entire article here.
The Washington Post, 2/22/12
Experts react to Obama's corporate tax proposal
The White House released its proposed principles for overhauling the corporate tax code — bringing the rate down to 28 percent, establishing a minimum tax, and expanding credits for R&D and manufacturing. It's not a plan so much as a framework.
The Washington Post asked a variety of experts what they think of the idea.
Mark W. Everson, alliantgroup Vice Chairman and former Commissioner of the IRS (2003-2007):
In laying down its marker for business tax reform, the Administration has recognized the need for presidential leadership. While pushing for simplification, rate reduction, and greater permanency in the tax code, the Administration wisely advocates that certain incentives be continued or even strengthened — notably for manufacturing and the promotion of innovation. The Administration wants to increase the competitiveness of American businesses “large and small.” Establishing a balanced approach won't be easy given the political fire power of large multinational corporations. Moreover, meaningful business tax reform will likely only be achieved as part of a broader effort also addressing individual tax reform. Congress should take into account all the moving parts, not just some of them.”
Other tax experts commenting included the Managing Principal, Tax Policy Group at Deloitte Tax LLP; the President of the National Small Business Association; Director of Citizens for Tax Justice; Professor of Accountancy in the University of Notre Dame's Mendoza College of Business; and Director of the Tax Policy Center.
Read the entire article here.