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Its an amendment to HR 4213 entitled "The American Jobs and Closing Tax Loopholes Act of 2010."

The summary of the provisions can be read here
http://finance.senate.gov/newsroom/chai ... 7a00703c36" onclick="window.open(this.href);return false;

The highlights are the following:

• Provide tax relief to businesses and State and local governments to help them invest and create jobs;
• Provide important tax cuts to put money back in the pockets of working families;
• Help restore the flow of credit to enable small businesses to expand and hire new workers by extending small business loan programs;
• Expand career training programs for Americans who are looking for work;
• Extend eligibility for unemployment insurance benefits, COBRA health care tax credits and other critical programs that families and communities depend on through December 31, 2010;
• Ensure that seniors, military service members and Americans with disabilities continue to have access to doctors they know and trust; and
• Close tax loopholes for wealthy investment fund managers and foreign operations of multi-national companies.

There are two major changes in the corporate income tax side that will greatly increase the amount tax US multinational corporations pay. They address a common planning loophole we use and also a play on foreign tax credits and amortization that is used by every US multinational corporation now. The closing of the corporate loopholes alone is estimated to generate $1 billion over 10 years, but I think it will be more than that actually.

The bill has a whole bunch of other stuff in it that I haven't looked. It was a surprise introduction so there hasn't been a whole lot of comment on it yet. But it is expected to pass both houses by the end of next week.

You sure have a lot more faith in this than I do. It's not that much of a surprise bill, though, as it's part of the doc-fix that is needed to postpone the pain of one of the ObamaCare provisions that would've significantly cut Medicare payments - of course, this just means that program is really costing more than originally announced, but that's not unexpected - everyone knew they wouldn't allow those cuts to happen and now they won't happen until at least 2014.

The bill also contains the unemployment extensions that will take it out to 99 weeks and the end of the year - considering that the unemployment benefits are expiring in June for some people then the speed of this probably passing isn't shocking.

As for the job creation, there's nothing really new in the bill - just a lot of extensions of things already out there. And those things already out there aren't really spurring job creation right now so I'm not sure how this is going to magically make those porgrams all of a sudden start working.

As for the taxes, I'm not sure why you think a Congressional estimate is going for how much revenue it will produce is off the mark, and off the mark low. They need the numbers to match up so that they can say the doc fix and everything else is deficit neutral, so why would they underestimate? And $1B over 10 years is almost pocket change - that's about 0.0025% of the budget this year.

And we'll see about the carried interest issue and the change in taxation for that. There are certainly legal ways to change how fund managers are paid that could dodge that tax, and that's really the biggest revenue grab in all of this.

Maybe I'm skeptical, but there doesn't appear to be anything new or really profoundly noteworthy in this bill.

GannonFan wrote:You sure have a lot more faith in this than I do. It's not that much of a surprise bill, though, as it's part of the doc-fix that is needed to postpone the pain of one of the ObamaCare provisions that would've significantly cut Medicare payments - of course, this just means that program is really costing more than originally announced, but that's not unexpected - everyone knew they wouldn't allow those cuts to happen and now they won't happen until at least 2014.

The bill also contains the unemployment extensions that will take it out to 99 weeks and the end of the year - considering that the unemployment benefits are expiring in June for some people then the speed of this probably passing isn't shocking.

As for the job creation, there's nothing really new in the bill - just a lot of extensions of things already out there. And those things already out there aren't really spurring job creation right now so I'm not sure how this is going to magically make those porgrams all of a sudden start working.

As for the taxes, I'm not sure why you think a Congressional estimate is going for how much revenue it will produce is off the mark, and off the mark low. They need the numbers to match up so that they can say the doc fix and everything else is deficit neutral, so why would they underestimate? And $1B over 10 years is almost pocket change - that's about 0.0025% of the budget this year.

And we'll see about the carried interest issue and the change in taxation for that. There are certainly legal ways to change how fund managers are paid that could dodge that tax, and that's really the biggest revenue grab in all of this.

Maybe I'm skeptical, but there doesn't appear to be anything new or really profoundly noteworthy in this bill.

Sorry, I should have clarified. The inclusion of the tax reform sections is what was the surprise.

And I also linked to yesterday's summary, which doesn't include the summary of the major corproate tax reform.

Denial of foreign tax credit with respect to foreign income not subject to United States taxation by reason of covered asset acquisitions. There are certain rules that permit taxpayers to treat a stock acquisition as an asset acquisition under U.S. tax law. Taxpayers can obtain similar results by acquiring interests in entities that are treated as corporations for foreign tax purposes, but as non-corporate entities (such as partnerships) for U.S. tax purposes. These transactions ("covered asset acquisitions") result in a step-up in the basis of the assets of the acquired entity to the fair market value that was paid for the stock (or interest in the business entity). In the foreign context, this step-up usually exists only for U.S. tax purposes, and not for foreign tax purposes. As a result, depreciation for U.S. tax purposes exceeds depreciation for foreign tax purposes, such that the U.S. taxable base is lower than foreign taxable base. Because foreign taxes – and therefore foreign tax credits – are based on the foreign taxable base, there are more foreign tax credits than are necessary to avoid double tax on the U.S. tax base. Taxpayers are using these additional foreign tax credits to reduce taxes imposed on other, completely unrelated foreign income. The bill would prevent taxpayers from claiming the foreign tax credit with respect to foreign income that is never subject to U.S. taxation because of a covered asset acquisition. The provision would generally apply to related party transactions occurring after the date of introduction and unrelated party transactions occurring after the date of enactment. This proposal is estimated to raise $4.025 billion over 10 years.

This is a game changer with respect to corporate acquisitions. And while $400 million may be small compared to the budget, it represents a completely different way of thinking.

That's why I thought the $10 billion was low.

Sorry - I guess its not major for non-corproate tax geeks.