Tax Hikes in Rangel’s “Mother of All Tax Bills”

Tax Hikes in Charlie Rangel’s“Mother of All Tax Bills”

• Surtax  of up to 4.6% on Americans earning as little as $150,000 per year
  Cost: $831.7 billion over 10 years
• Phase out deductions and personal exemptions for “high income” taxpayers
  Cost: $28.6 billion over 10 years
• Further restrict miscellaneous itemized deductions
  Cost: $7 billion over 10 years

• Tax investment partnership manager’s capital gains as ordinary income
  Cost: $25.7 billion over 10 years
• Include deferred comp of overseas hedge fund managers in current income
  Cost: $22.6 billion over 10 years
• Modify unrelated business income rules for investment partnerships
  Cost: $1.3 billion over 10 years
• Treat gain on sales between related parties as ordinary income
  Cost: $135 million over 10 years
• Expose most S-corporation profits to Social Security and Medicare taxes
  Cost: $9.4 billion over 10 years
• Require brokers to report the basis of all future stock and mutual fund sales
  Cost: $4.3 billion over 10 years
• Repeal the domestic production activities deduction
  Cost: $115 billion over 10 years

• Deny deductions to corporations that defer taxation on foreign income
  Cost: $106 billion over 10 years
• Repeal worldwide allocation of interest
  Cost: $26 billion over 10 years
• Limitation on deductions for companies doing business in some treaty nations
  Cost: $6.4 billion over 10 years
• Repeal last-in, first-out (LIFO) accounting rules
  Cost: $106.5 billion over 10 years
• Repeal the lower of cost or market record
  Cost: $7.1 billion over 10 years
• Special rule for accrual method service providers not applied to corporations
  Cost: $225 million over 10 years
• Amortization of intangibles extended from 15 years to 20 years
  Cost: $20.7 billion over 10 years
• Codification of the “economic substance doctrine”
  Cost: $3.6 billion over 10 years
• Reduce corporate dividends received deduction by 10 percentage points
  Cost: $4.6 billion over 10 years
• Ordinary income taxation of S-corp stock option in an ESOP
  Cost: $606 million over 10 years
• End domestic international sales corporation (DISC) rules
  Cost: $881 million over 10 years
• Treat distributions of debt in a spin-off transaction the same as property
  Cost: $235 million over 10 years

TOTAL TAX INCREASES: $1.33 Trillion Over 10 Years