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More Tax Reforms Coming Soon?

President Barack Obama's FY2013 budget proposal calls for tax reforms.

On Monday, President Barack Obama sent his proposed FY 2013 budget to Congress, and as the Journal of Accountancy points out, there are a number of ideas about overhauling the tax system.

 

The source explains that there are five main tax reform points in the president's budget: making the Internal Revenue Code more simple and reducing tax rates; cutting the deficit while insulating "progressivity;" boosting job creation and economic growth. The budget also seeks to fix the "inefficient and unfair tax breaks" and observe the "Buffet Rule," which the source notes is the idea that any household pulling in more than $1 million in annual income does not pay a tax percentage lower than middle class families.

Additionally, the proposal would impact corporate aircraft depreciation provisions.

"Currently, airplanes, such as corporate jets, that are not used in commercial aviation or to carry freight can be depreciated over five years," according to the JoA. "Commercial aircraft, on the other hand, have a seven-year depreciation period."

President Obama's plan would make a blanket seven-year depreciation for all aircraft, hopefully slashing the national deficit by $2 billion over the next decade.

According to Accounting Today, the major financial institutions would also be levied a "Financial Crisis Responsibility Fee" to reimburse some of the cost of the Troubled Asset Relief Program.

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