House Passes Fast-Track Tax Reform Legislation

(August 2, 2012) Following House passage on August 1st of the Job Protection and Recession Prevention bill (H.R. 8), extending the current tax rates for one year for all taxpayers, the House passed the companion Job Creation Through a Simpler, Fairer Tax Code bill (H.R. 6169)on August 2, 2012 by a vote of 232 to 189.  The bill would provide deadlines for House and Senate committee action on tax reform and require certification by the Joint Committee on Taxation of the following five principles:

  1. The current six individual tax brackets would become two brackets of 10 and not more than 25 percent;
  2. The maximum corporate tax rate would be reduced to not more than 25 percent;
  3. The tax base would be broadened to maintain revenues at between 18 and 19 percent of GDP;
  4. Repeal the alternative minimum tax; and
  5. The international tax system would be converted from a worldwide to a territorial tax system.

Like its companion legislation, this bill is largely partisan and not likely to be taken up by the Democratic-controlled Senate.

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