Tax Reform and Other Pending Tax Changes (00319945)

There is a growing momentum for U.S. tax reform. 2012 saw numerous congressional hearings on the important issues of tax rate reform: corporate, international, business, and individual. Lawmakers and taxpayers are also aware of the mounting series of challenges ranging from a growing federal deficit, decreasing tax revenues, and heated economic competition from the international business sector. In the near future, lawmakers must begin working toward a real consensus on such issues as what the corporate rate should be, how to offset the revenue loss, and whether tax reform can be accomplished through base broadening or if discussions must also include a new consumption tax such as a VAT.

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Question 1

Correct

New taxes proposed as a means to raise federal revenues have included all of these types except:

National retail sales tax

(You Answered) (Correct Answer) Multinational corporate repatriation tax

Value-added tax (VAT)

Environmental tax

Question 2

Correct

The President’s Framework proposes to stimulate domestic manufacturing through all of these ways except:

Reducing the corporate tax rate

Increasing the Code Sec. 199 deduction to a special level for advanced manufacturing

(You Answered) (Correct Answer) Eliminating double taxation of C corporation profits

Expanding the Code Sec. 199 domestic production activities deduction

Question 3

Correct

A worldwide tax system, rather than a territorial one, is favored by:

(You Answered) (Correct Answer) President Obama

The Deficit Commission report

Republican party leadership

Congressman Dave Camp

Question 4

Correct

Recent reform proposals aimed at benefitting individuals include all of the following except:

Turning certain deductions into tax credits to make them more equitable;

Lowering the tax rate for capital gains and dividends to streamline investment decisions

(You Answered) (Correct Answer) Improving the alternative minimum tax by allowing additional exclusions and deductions to protect a greater number of middle-class taxpayers; Increasing the amount of personal exemptions

Collapsing the number of tax rates from six to two or three

Question 5

Correct

The Deficit Commission’s tax code reform proposal calls for lower tax rates, which would be partly paid for through repeal of several tax expenditures, including the deduction for:

Retirement account contributions

(You Answered) (Correct Answer) State and local taxes paid

Charitable contributions

Employer-provided health insurance