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Government
& Public Affairs Update
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Government &
Public Affairs Team
Reginald M. Turner
John
Van Fossen, Practice Group Leader
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President Obama Announces Tax Reform
Plan
Following through on his campaign
promises to crack down on tax loopholes and overseas shelters,
President Obama announced today his administration's plan for what he
described as a restoration of fairness and balance to the tax code,
which the White House expects will result in an additional $198.3
billion in revenue over 10 years.
However, a number of groups have already criticized the plan.
U.S. Chamber of Commerce Chief Economist Dr. Marty Regalia said,
"The United States is the only major industrialized country
which double taxes the overseas earnings of our companies. Since
other countries don't subject their companies to double taxation,
U.S. companies need deferral to stay competitive in the global
marketplace.
"When you limit deferral, you limit the ability of U.S.
companies to compete, you impede growth in the U.S. economy, and you
cause the loss of jobs - both at the companies directly impacted and
companies in their supply chains."
The plan includes a number of provisions, including 1) reforming
deferral rules to prevent companies from receiving deductions on
their U.S. tax returns supporting their offshore investments until
they pay taxes on their offshore profits; 2) closing loopholes to
prevent companies from artificially inflating or accelerating
existing credits that allow U.S. companies to claim a credit on their
foreign-taxed income against the companies' U.S. income; 3) requiring
that certain foreign subsidiaries to be considered as separate
corporations for U.S. tax purposes.
To read the entire White House press release on President Obama's
plan, click here.
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Administration
Highlights Green Tax Credits
The Department of Treasury took the
occasion of Earth Day last month to remind the American public of 13
important energy-related incentives included in the federal economic
stimulus bill earlier this year.
Due to the Recovery Act, homeowners can claim larger tax credits for
installing alternative energy equipment, as the new law eliminates
limits on the credits that can be claimed for solar water heaters,
wind turbines, and geothermal heat pumps. The Act also provides
for a credit of 30 percent of the cost of certain home energy-saving
improvements, such as adding insulation, energy-efficient exterior
windows, and energy-efficient heating and air conditioning
systems. Homeowners can now claim up to $1,500 of these credits
during 2009 and 2010, instead of the $500 lifetime limit under the
old law.
"These new or expanded energy incentives do two critical things:
they increase savings for Americans and they help protect the
environment," said Treasury Secretary Timothy Geithner.
"From day one, this Administration has pursued every option to
help ordinary Americans. The 13 energy incentives in the
Recovery Act provide $12.7 billion in renewable energy and energy
efficiency incentives. These incentives will lead to an
increase in jobs at energy-specific businesses, investment in our
long-term energy needs, and protect our environment."
To read Treasury's press release on these incentives, click here.
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If you have any questions concerning these issues,
please contact Chris Wagner at 202.772.0924 or cwagner@clarkhill.com.
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To find out
more about Clark Hill and our Government & Public Affairs
Practice Group, visit clarkhill.com
or call 800.949.3124
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