“Industry Feedback on Limit Up/Limit Down”

Tuesday, April 23, 2013

4:30 PM EDT to 5:15 PM

Call In Number 1.800.346.2923 142 034#

Tuesday, March 26, 2013

4:30 PM EDT to 5:15 PM EDT

Call In Number 1.800.346.2923 142 034#

Partial Itinerary for Washington DC Visits

March 18th and 21st

• SEC Commissioners
• Counsel, House Financial Services Committee, (Minority Side)
• House Fin’l Services Sub Committee, GSE’s & Trading and Markets
• House Fin’l Services Committee

Issues

• SEC Roundtable on Decimalization
• Petition for Rulemaking on Form 13F
• French FTT, and FTTs in general
• Industry feedback on RFP for CAT

Call Notes from SEC Roundtable On Decimalization
courtesy of Williams & Jensen are available HERE

  2013 Financial Policy Landscape

Wednesday, January 30, 2013

1:00 PM EDT to 2:00 PM EDT

During this webinar, analysts from BGOV will discuss issues that greatly impact our markets today, including:

• The JOBS Act and Volcker Rule
• The composition of the House Financial Services Committee and Senate Banking Committee

  This webinar will be moderated by Bloomberg reporter, Nina Mehta, and the panelists will include David Franasiak of Williams & Jensen and BGOV analyst Cady North, with STA President & CEO Jim Toes presiding.

Last tax update of the 112th Congress (from late last night)….

The House just voted 257 to 167, concurring in the Senate amendment to H.R. 8 (http://www.gpo.gov/fdsys/pkg/BILLS-112hr8eas/pdf/BILLS-112hr8eas.pdf) (the “American Taxpayer Relief Act of 2012″), effectively sending the bill to the President, who will sign it into law based on a statement by the President today (http://www.whitehouse.gov/the-press-office/2013/01/01/statement-president-senate-deal-extend-middle-class-tax-cuts) on the deal.  85 Republicans and 172 Democrats voted in favor, and 151 Republicans and 16 Democrats voted against the legislation.

That’s it for the 112th Congress, folks, at least on tax issues.  Have a Happy New Year!

President Obama returned to Washington yesterday to re-start negotiations on the fiscal cliff. As of today, there is no sign that any progress has been made. Though it is possible that the President and Speaker Boehner have discussed negotiations in the past few days, there have been no comments made from either party.

At the end of last week, Speaker Boehner said he would call House members back to Washington “if needed,” and told them to be available within 48 hours’ notice.

Yesterday Evening, Speaker Boehner and the Republican leadership team said “the Senate must act first” to revive efforts to avert the $600 billion in automatic tax hikes and spending cuts due to be triggered on Jan. 1. (Source)

This morning, Leader Reid made a statement on the fiscal cliff and urged Speaker Boehner to call the House back into session today. Leader Reid emphasized that the Senate cannot bring up any bill without 60 votes. He said it is up to the House to take up the Senate bill, and stated that if they did, it would pass. Leader Reid also stressed that time is winding down before the end of the year. He added that Speaker Boehner needs 48 hours to get the House back to Washington to vote, which Reid said would be Saturday.

Recall that on Friday, President Obama proposed a scaled-down tax package instead of the broader $2.4T deal. The President’s package would be less comprehensive than all previous proposals. The latest White House offer proposed the following measures:

• Preserves the reduced tax rates for individuals earning up to $200,000 ($250,000 for married filing jointly);
• Protects unemployment insurance for 2 million Americans;
• Includes language laying the groundwork for future deficit reduction.

Also recall that the Senate passed bill, “The Middle Class Tax Cut Act,” S. 3412:

• Extends the Bush Era tax cuts for the middle class for one year;
• Provides for a 20% top rate on capital gains and dividends (not including the 3.8% tax that kicks in next year under the health care law);
• Includes a patch for the AMT that indexes the exemption to inflation.

The Middle Class Tax Cut Act does not extend the payroll tax cut, does not renew extended unemployment benefits, or a “doc fix.” The bill does not renew any expiring tax extenders that expired at the end of 2011, or that will expire at the end of 2012. Lastly, the bill does not delay or roll back automatic spending cuts (the sequester).

Today

The House takes up two measures related to Speaker John Boehner’s “Plan B” tax proposal today. The House Rules Committee met last night to set the ground rules for today’s debate on the two proposals.  H J Res 66 would continue Bush-era tax rates for everyone on the first $1 million of earned income.  Those earning more than $1 million would pay a higher tax rate. The second measure, HR 6684, would replace the sequester for one year with other spending cuts.  (Source)

Debate on Plan B is expected to begin at 12 pm, and sources report that the first House votes on Plan B are scheduled to start between 2:30-3:30 pm.

White House Press secretary Jay Carney will brief at 12:30. (Source)

Recap

Here’s the most recent Whip Count on Plan B. (Source)

House Democratic leaders are urging their members to unite against Speaker Boehner’s “Plan B” to avoid the fiscal cliff.  (Source)

President Obama vowed to veto “Plan B” if it passes.  The White House also released a fact sheet detailing the harmful impacts of the Congressional Republican “Plan B” legislation. (Source)

In his press conference yesterday, President Obama said he would “not negotiate around the debt ceiling.” (Source)  Obama insisted that Boehner include a long-term U.S. debt limit increase in legislation for a proposed budget deal. (Source)

President Obama also said it was “puzzling” that Boehner would offer a “fallback plan” when the two sides were only a few hundred billion dollars apart, and added he would be willing to offer more spending cuts.  “If you look at Speaker Boehner’s proposal and you look at my proposal, they’re actually pretty close,” Obama said during a 35-minute news conference. “There are a few differences, but we’re right there.” (Source)

Sen. Orrin Hatch (R-UT) announced that he would back Boehner’s Plan B. (Source)

See below for a brief summary of the two respective bills.

Also attached are summaries prepared by the House Ways and Means staff of: (1) “Plan B” the Permanent Tax Relief for Families and Small Businesses Act of 2012; and (2) H.R. 15, The Middle Class Tax Cut Act of 2012.

The JCT prepared revenue scores for both: (1) “Plan B” and (2) H.R. 15.

“Plan B” Summary:

• Extends the Bush Tax Cuts for all earners under $1million and sets the top rate at (39.6 or something else?);
• Extends 15% capital gains and dividend rates for all earners under $1 million and sets the top rate at 23.8% inclusive of ACA surtax;
• Permanently extends parity for capital gains and dividend taxes;
• Makes existing marriage penalty relief permanent;
• Makes the $1,000 child credit amount permanent;
• Permanently repeals both PEP and Pease limitations on personal exemptions;
• Makes permanent the 2012 estate tax law which is a $5 million exemption and 35% rate;
• Makes permanent the education related tax benefits and the non-refundable adoption credit;
• Permanently extends immediate section 179 expensing for small businesses ($250,000 and indexed for inflation);
• Permanently patches the AMT

Middle Class Tax Cut – H.R. 15 Summary:

• Extends for one year the Bush Tax Cuts for all earners under the $200k/$250k threshold;
• Extends 15% capital gains and dividend rates for all earners under $200K/$250K and sets the top rate at 23.8% inclusive of ACA surtax;
• Extends the repeal of both PEP and Pease limitations for one year for all earners under the $200k/$250k threshold;
• Extends the current $1,000 child credit amount for one year;
• Extends current marriage penalty relief for one year;
• Extends for one year current law for the earned income tax credit (simplification and increase);
• Extends for one year education tax incentives;
• Extends for one year the adoption tax credit, the employee tax credit for employee child care; and increased dependent care credit;
• Extends for one year the American Opportunity Tax Credit;
• Extends for one year immediate section 179 expensing for small businesses ($250,000 and indexed for inflation)

H.R. 15 was silent on estate tax issues, so those policies would revert to pre-2001 law, or $1M exemption and 55% rate.

Procedural Status
The bill that will be voted on is H.J. Res 66, which was a trade measure on Burma that was sent back from the Senate.  If the process continues to go forward as planned, there would be two amendment votes allowed on this bill tomorrow in the House – one would be the Substitute that includes the text of H.R. 15, and the second would be the Plan B version.  While the Rules Committee has not yet met on the bill to set out the process explicitly, if both amendments were to be adopted, the Plan B amendment would likely be second and would be the final text that was sent to the Senate and the Democratic alternative would be supplanted.

The fact this bill has passed the House and Senate already gives it procedural protections in the Senate, and it will limit the ability of Majority Leader Reid (D-NV) to offer more than one amendment to it in the Senate before filing cloture.  Reports suggest that the Senate may try to take up the bill and send it back to the House, after substituting into it the last offer by the White House (rates increase over $400k, $1.2 trillion in new revenues etc.) to put pressure on Senate Republicans and see if they would vote for that version.

Analysis
It appears unlikely that the first amendment that represents H.R. 15 will be adopted with the requisite amount of votes tomorrow.  It is more likely but not a certainty that the House will pass “Plan B” as a political message before the end of the week, though this is a fluid environment.

The political purpose of this vote is likely to demonstrate to the White House how difficult it is for House Republicans to go where President Obama would like them to go in a deal, and give the Speaker some leverage in the talks.  The bill is not expected to be enacted, and it seems unlikely to be the final word, rather it may lead to more negotiations or may make them more difficult, or both, depending on who you believe in these discussions.

Today

President Obama will deliver a statement in the Brady press briefing room “about the policy process the Administration will pursue in the wake of the Newtown tragedy,” the White House announced. Obama is expected to announce a guns task force lead by Vice President Joe Biden that will guide the administration’s response.(Source)

President Obama will also speak at the Diplomatic Corps Holiday Reception at the State Department.(Source)

Recap

House Speaker John Boehner (R-OH) plans to use a vote on his alternate budget proposal to highlight Republican opposition to tax increases sought by President Barack Obama, as the two sides negotiate a larger fiscal deal. The House may vote tomorrow on Boehner’s “Plan B,” which would raise tax rates on income over $1 million, rather than the $400,000 threshold the president proposed in his latest offer. With his push for a vote on his proposal, Boehner is looking to pressure Obama to accept deeper spending cuts and a higher threshold for rate increases by showing how hard it will be to win Republican support for any tax increase.  (Source) The draft legislation is entitled “Amendment to the Senate Amendment to J.J.RES.66” and is summarized as follows:

• Permanently extends income tax rate cuts for Americans making less than $1 million, covers 99.81% of all taxpayers;
• Permanently extends the current estate and gift tax ($5 million at 35 percent and indexed for inflation);
• Permanently extends section 179 expensing for small businesses ($250,000 and indexed for inflation);
• Permanently stops the Alternative Minimum Tax (AMT) from hitting more middle class families;
• Permanently extends parity for capital gains and dividend taxes, preventing dividend taxes from being taxed at the highest rates; and sets the rate at 23.8% inclusive of ACA taxes;
• Does not include anything on the debt limit or other non-tax policy items

President Obama rejected Boehner’s “Plan B,” but said he remained hopeful that a deal can be reached. (Source)

Senate Minority Leader Mitch McConnell (R-KY) on Tuesday endorsed House Speaker John Boehner’s so-called “Plan B” to avert the fiscal cliff, a proposal that raises tax rates on income over $1 million but extends lower rates for 98 percent of Americans. (Source)

Majority Leader Harry Reid (D-NV) said Boehner’s proposal was dead on arrival in the Democratic-controlled Senate. (Source)

Senator Jeff Bingaman (D-NM) asked that Congress not tie tax extenders to the fiscal cliff negotiations.  ”Lost among the fiscal cliff debates on marginal tax rates and the sequester is a bipartisan package of important tax cuts that the House and the Senate should take up and pass immediately, regardless of whether Democrats and Republicans can reach a larger compromise.”  He was referring to a package of tax cuts passed earlier this year by the Senate Finance Committee, commonly referred to as the “tax extenders package.” (Source)