Domestic Taxes

Hundreds of insurance advisers are headed to Washington, as the industry tries to warn lawmakers not to touch tax incentives.

President Obama’s plan to include entitlement cuts in his budget was met with jeers from the right and the left on Friday.

The proposal would save around $9 billion over a decade and make the tax code fairer, an administration official said.

The Charitable Giving Coalition has launched a new website aimed at protecting the charitable deduction — the nonprofit sector’s latest effort to protect the break from being eliminated by tax reform.

According to a press release, the site will highlight how charitable giving helps communities around the country.

“We are fully committed to helping lawmakers understand the unique nature of the charitable deduction — and that it’s not a loophole, but a lifeline,” Sandra Swirski, executive director of the Alliance for Charitable Reform, said in a statement. “It’s unique because it encourages individuals to give away a portion of their income for the benefit of others.”

Ordinary taxpayers are forced to shoulder the burden for offshore tax dodging, a new report from a liberal group found.

U.S. PIRG’s report found that the Treasury collects around $150 billion less a year than it could because of tax havens – with around $90 billion of that potential revenue coming from multinational corporations. Individual taxpayers account for the other roughly $60 billion.

To make up for that $150 billion in revenue, PIRG found that the average U.S. taxpayer would need to cough up an extra $1,026. The average small business, meanwhile, would need to pay an additional $3,067 to make up for the $90 billion that corporations could be paying.

Sen. Carl Levin (D-Mich.), a longtime critic of offshore tax strategies, told a Thursday conference call that the current debate over how to reduce deficits amplified the need to take action against the use of tax havens.

Levin, the chairman of a permanent Senate subcommittee on investigations, released a report last year that found that Microsoft and HP both used offshore strategies that allowed them to avoid billions of dollars in taxes.

“These gimmicks that are being used do not serve an economic purpose,” said Levin, who is retiring at the end of 2014. “They’re only used for tax avoidance.”

“We’ve just got to end this,” the Michigan Democrat added.

The House's top tax writer will take his push for tax reform down the halls of Congress next week.

Ways and Means Chairman Dave Camp (R-Mich.) is scheduled to testify next Wednesday at a House Small Business Committee on how a simplified code can help smaller companies. The Small Business panel announced the hearing on Wednesday.

Camp released a framework on how to overhaul tax rules for small businesses last month, the third draft proposal the Michigan Republican has released in the last year and a half as he tries to build support for tax reform.

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The tax changes enacted at the start of the year made the tax code a bit more progressive, a left-leaning group said in a study released Tuesday.

Citizens for Tax Justice (CTJ) found that the top 1 percent of earners would pay roughly 24 percent of taxes in 2013, on 21.9 percent of total income. The top earners would have paid 23.1 percent under 2012 tax laws.

The bottom 60 percent of taxpayers would pay roughly the same share of taxes under the new system, CTJ said. CTJ’s study took into account federal, state and local taxes – including sales taxes.

The U.S. Chamber of Commerce gave lawmakers an extensive wish list for tax reform on Tuesday, calling for lower rates and less taxation of corporate offshore income.

But the powerful business lobby, in a statement to House Ways and Means working groups on tax reform, also did not offer many ideas for how to offset the costs of their proposed changes, illustrating once more the challenges in overhauling the tax code.

“We look forward to working with Congress, the committee, and the working group members as this process continues to make improvements to the code to create a tax environment that is increasingly pro-business and pro-growth,” the Chamber said.

A corporate coalition is using a new anniversary to lobby lawmakers over the need for tax reform.

Top executives from corporations in the RATE Coalition noted Monday that Japan lowered its corporate tax rate exactly a year ago — a reduction that gave the U.S. the highest statutory rate in the industrialized world.

“Coupled with our complicated tax system, this rate makes American businesses less competitive and makes the U.S. a less attractive place for investment, ultimately harming businesses, investors, workers and consumers,” 19 executives and a pair of interest group presidents wrote to the top tax writers in both the House and the Senate.

“We know that some choices may be difficult and understand that base-broadeners, such as eliminating tax expenditures, may be necessary to achieve the significant reduction in the statutory rate that is required for the U.S. to better compete globally,” the executives added.