S. 3413 would extend the 2001 and 2003 tax relief that is set to expire on Jan. 1, 2013 for one year through Dec. 31, 2013, including a straight extension of the expiring individual tax rates, family tax relief, death tax relief, and a patch to stop the Alternative Minimum Tax (AMT) from hitting millions of American middle-class families in 2012 and 2013. The AMT patch in the amendment is effective for tax year 2012 and 2013, since the patch has already expired at the end of 2011.
The amendment also directs the Finance Committee to undertake a comprehensive overhaul the U.S. tax code during 2013 and outlines specific proposals that tax reform should achieve, including:
* Simplification of the tax code that provides revenue neutral reform against current tax policy and includes the reduction in the number of tax preferences;
* An income tax rate for individuals that is significantly below 35 percent and a corporate tax rate that is no higher than 25 percent;
* Full repeal of the Alternative Minimum Tax (AMT);
* Applies increased revenue from economic growth to additional tax reductions and prevents such revenue from going towards additional federal spending; and
* Requires the adoption of a competitive territorial tax system as part of corporate tax reform.
There is no extension of the payroll tax cut in the amendment. In addition, the increased spending through the tax code from the partisan 2009 stimulus law (ARRA) is not included in the amendment.
In addition, traditional tax extenders, such as the research and development tax credit, are not included in the amendment. These tax extenders can be addressed through a regular order Senate Finance Committee process.
