Tax Reform Proposals and ESOPs

Earlier this year, President George Bush established an Advisory Panel on Tax Reform to identify the major problems in our federal income tax laws and to recommend options to make these laws simpler, fairer, and more conducive to economic growth. The President also directed the panel to make recommendations designed to raise approximately the same amount of money as the current tax system.

On Tuesday, November 1, 2005, the President's Advisory Panel on Federal Tax Reform delivered its final report to the Treasury Department. Among the numerous recommendations contained in the report are proposals for elimination of the alternative minimum tax (the AMT), eliminating the state and local tax deduction, imposing limitations on the home-mortgage interest deduction, and simplifying the rules relating to retirement plans. It is important to note that these recommendations are a long way from becoming law. They simply provide a starting point for discussions that may lead to specific proposals that eventually may be considered by Congress.

For the full story, please view the PDF.