Congress passes the Fraud Reduction and Data Analytics Act
The House and Senate have passed the Fraud Reduction and Data Analytics Act (H.R. 4180 and S. 2133). The bill is now on route to the president’s desk for signature. It requires federal agencies to implement the risk management guidelines and practices detailed in the Government Accountability Office’s (GAO) July 2015 report, “A Framework for Managing Fraud Risks in Federal Programs.” Both the legislation and report stemmed directly from work led by Public Sector Principal Greg Wallig. As a leaders in this area, Grant Thornton supported the bill’s passage in a recent trip to Capitol Hill.
“We’re happy to see this bill pass and other government financial management and performance improvement legislation pick up speed on Capitol Hill,” said National Managing Partner of Public Sector Carlos Otal. “Government operations can be enhanced with new statutory requirements that provide lasting, positive effect on the government’s performance and efficiency. In addition, this legislation will help focus agencies on addressing longstanding challenges and provide concrete steps toward continued mitigation of fraud, waste and abuse in government programs.”
“Passing the Fraud Reduction and Data Analytics Act was a big win for Grant Thornton, but also for Congress,” said National Managing Principal of Public Policy Mary Moore Hamrick. “Lawmakers want to show positive advancement on key issues before the national conventions and ultimately, the November election,” There are only about 50 days remaining on the Congressional calendar. We’ll start to see the legislative process slow as all eyes focus on the build up to the 2016 election.”
Republican tax reform blueprint would slash rates and cut incentives
House Republicans released a “blueprint” for tax reform that calls for sharp cuts in tax rates and full expensing for business investments. The framework proposes a 33% top individual rate, 20% top corporate rate, and a 25% rate on active business income from a pass-through. It would repeal scores of tax benefits, limit interest deductions to go along with full expensing, and make sweeping changes to international tax rules.
The plan is the product of a House Republican task force charged with delivering a tax reform platform before the Republican National Convention in July. It is more a set of aspirational goals than a finished legislative product, but its proposals would have a profound impact on business.
The plan uses many tenets of the cash flow tax bill proposed by Rep. Devin Nunes (R-CA).
The core principles of the blueprint include the following goals:
- Cutting the top individual rate from 39.6% to 33%
- Creating a 50% exclusion for dividends, interest and capital gains, resulting in a top rate of 16.5%
- Repealing all itemized deductions except charitable giving and mortgage interest
- Repealing estate and gift taxes
- Cutting the corporate rate to 20%
- Creating a separate 25% rate on business income from pass-throughs
- Providing full business expensing while repealing the interest deduction
- Shifting to a territorial tax system with a 100% dividend deduction
View the Washington National Tax Office’s latest Tax Legislative Update for more details on the blueprint and its impact on the outlook for tax reform.
Seeking co-sponsors for The Main Street Fairness Act (H.R. 5070)
Grant Thornton’s business equivalency rate solution was incorporated into a bill introduced by Rep. Vern Buchanan (R-FL). The Main Street Fairness Act would ensure all qualified business income earned by pass-through businesses is taxed at rates equivalent to incomes earned by corporations. National Managing Partner of Tax Services Randy Robason, Tax Partner Kullen Birkeland and Mary Moore Hamrick spent the day on Capitol Hill building support for the bill.
“A foundation for tax reform is actively being laid in preparation for 2017,” said National Managing Partner of Tax Services Randy Robason. “We’re seeing a big push to put forth ideas and collect feedback from the business community. Having an ear to the ground helps Grant Thornton shape policy and assist clients in preparing for the business impact.”