Legislative update - Senate Democrats prepare sequestration alternative with tax provisions  

February 14: Senate Democrats would replace the across-the-board spending cuts known as “sequestration” required by the Budget Control Act of 2011 for the 2013 calendar year with $55 billion in specified spending changes and an equal amount of new revenue from tax changes.

According to an outline of the American Family Economic Protection Act, the tax provisions include:


  • The “Buffett rule” – Imposing on taxpayers with adjusted gross incomes greater than $1 million a minimum 30% tax on adjusted gross income (less charitable contributions), phased in between $1 million and $2 million
  • Outsourcing costs – Denying deductions for the cost of shipping equipment overseas, terminating leases, and other expenses associated with moving a business to another country
  • Tar sands – Including oil from tar sands among the petroleum products that are subject to taxes that support the Oil Spill Liability Trust Fund

Legislative text of the proposal was unavailable. The sequester is scheduled to take effect March 1, 2013. It is unclear when the Senate will consider alternatives. It is in recess next week.



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