January 27, 2014
January 27, 2014
Oregon Senator Ron Wyden is projected to become the next chairman of Senate Finance Committee. As chairman, Wyden will run one of the most powerful and influential Senate committees and play a significant role in shaping U.S. fiscal policy in the foreseeable future. Consequently, business interests and political experts are looking for clues as to how he may lead. If his recent legislative record is any indication, there is reason to believe that Wyden may do the following as Finance chair:
1. Cut corporate tax rates and end offshore loopholes. Wyden’s tax reform legislation would have cut the corporate tax rate from 35 percent to 24 percent. It would have also eliminated loopholes allowing multinational U.S. companies to defer taxes on income earned abroad but incentivized them to report the earnings on U.S. income tax at a significantly lower rate.
2. Reduce the number of income tax brackets and end the Alternative Minimum Tax. Currently there are six individual income tax brackets. Wyden has proposed lowering that number to three—15 percent, 25 percent and 35 percent. Under Wyden’s plan, the top tax bracket would be lower than the current rate of 39.5 percent, but it would kick in earlier—$140,000 for joint filers, compared to the current $450,000. He also supports ending the Alternative Minimum Tax, which would provide tax relief to certain individuals, corporations, estates and trusts.
3. Make business tax breaks more stable and predictable. Wyden has recently gone on record saying that the continuing uncertainty around tax breaks, such as the business research and experimentation tax credit, stifles innovation. He called the uncertainty a “roller coaster” for business that needs to be addressed sooner rather than later.
4. Protect charitable deductions. The Obama Administration has proposed capping the tax benefit of all itemized deductions (including charitable contributions) at 28 percent. Wyden is among key lawmakers who’ve sent official letters to colleagues warning that related proposals would cost charitable organizations billions of dollars in funding each year.
5. Tax Internet gaming. Tax reform legislation Wyden introduced with Republican Senator Judd Gregg originally provided licensure for Internet gaming operators, as well as proposed taxing them at a rate of 2 percent of total deposits.
6. Accelerate bi-partisan tax reform. Tax reform has been a hot topic among congressional lawmakers, but action on meaningful reform has stalled. As finance chair, Wyden may accelerate the discussion. He has been a lead Senate sponsor and strong advocate of bi-partisan, comprehensive tax reform.
7. Monitor utilities to ensure fair rates for consumers. The U.S. economy as a whole and manufacturers have benefited from the vast new supply of cheap natural gas, but benefits to consumers have not materialized as quickly. According to Wyden, “I’m working on ensuring that there are strong incentives to prevent utilities from overcharging consumers and to make sure customers are fully repaid when rates are raised unjustly.”
The above items are few legislative actions Wyden may pursue. He is viewed as a wild card within his own party and has proven a willingness to reach across the political isle to look for bipartisan solutions to some of our nation’s most pressing problems.