On February 13, the Treasury Department released its “General Explanations of the Administration’s Fiscal Year 2013 Revenue Proposals.” Known as the “Green Book,” the document provides an explanation of the Administration’s FY 2013 tax proposals. This alert summarizes the Administration's tax proposals, using the same organization and titles as used in the Green Book.
Many of the proposals included in the FY 2013 budget are the same as, or are modified versions of, proposals included in the Administration’s FY 2012 budget and the Administration’s submission in September 2011 to the Joint Select Committee on Deficit Reduction. The remainder largely includes provisions unveiled by the President during his State of the Union Address in January and in the days leading up to the release of the budget, including measures to encourage businesses to operate in the U.S. and to discourage them from moving offshore.
However, the budget includes nearly 30 new proposals, including:
- A temporary 10 percent tax credit for new jobs and wage increases;
- A move to tax as regular income dividends earned by taxpayers in the top two income tax brackets;
- A new Manufacturing Communities Tax Credit;
- A change in the treatment of dividends to be taxed as regular income;
- An increase in the domestic production activities deduction for certain manufacturing activities;
- Tax credits for advanced technology vehicles and medium- and heavy-duty alternative-fuel commercial vehicles;
- Changes to refunding rules for state and local bonds;
- Modifications to proration rules for life insurance general and separate accounts;
- A proposal to prevent the use of leveraged distributions from related foreign corporations to avoid dividend treatment;
- A proposal to prevent deductions for the contributions of conservation easements on golf courses;
- A streamlining of audit and adjustment procedures for large partnerships; and
- A coordination of certain income and transfer tax rules applicable to grantor trusts.
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