Treasury "Blue Book" Released

The Bush Administration's Treasury Department recently released their "blue book" of revenue measures for the year.  This is a rather dense document, but I thought I would take the time to update it for you.  If you want to get into any technical details, be sure to pour into the document.  If you have any questions on provisions, let me know and I will answer them.

The Blue Book details all of the revenue proposals of the Administration for the President's budget.  Here are the pieces of interest in order that they are presented:

1. Permanently extend the provisions of the 2001 and 2003 tax cuts (lower personal tax rates, lower capital gains and dividend rates, higher business expensing, child tax credit, marriage penalty, death tax elimination, etc.)
2. Tax-free savings.  Create lifetime savings accounts ($5000 Roth-style per person limit for any reason), retirement savings accounts ($5000 Roth-style per worker and spouse for retirement), and employer retirement savings accounts (dressed-up safe-harbor 401(k) plan)
3. Business investment. Double the Section 179 limit to $200,000 starting in 2008 with a phaseout of $800,000 (both inflation-indexed)
4. Health care provisions.  New standard deduction for health insurance purchased to replace exclusion from personal income; payroll tax credit to dovetail the standard deduction; expansion and flexibility of health savings accounts; improve the health coverage tax credit and the orphan drug credit
5. Charitable contributions.  The biggest one here is a permanent allowance for tax-free charitable contributions directly from IRAs
6. Education.  Two big ones here include making the teacher expenses adjustment permanent, and allowing 529 plan contributions to count toward the Saver's Credit
7. Environment.  Make brownsfield expensing permanent, and eliminate volume cap on private activity bonds for water infrastructure
8. 9/11.  New York (city and state) would receive tax credits for transportation infrastructure going to and from Ground Zero
9. Child simplification.  Simplify uniform definition of a child, ease filing status requirement on earned income credit, and reduce complexity of additional child tax credit
10. Tax gap.  Tax compliance would be enforced in several ways.  The biggest ones include requiring businesses to file 1099-MISCs for payments to corporations of more than $600 for the year, brokerage firms reporting basis in stock and mutual fund sales, credit card business summaries being forwarded to the IRS, requiring a TIN for government contractors, more regulation of employee leasing companies, and increasing penalties
11. Tax administration.  Too boring even for me to list
12. Unemployment insurance.  Extends the FUTA 0.2% surtax
13. Energy.  Increases depreciation life for natural gas distribution lines
14. Tax extenders.  Extends all expiring provisions except 9/11 and Katrina, including a 1-year AMT patch

All together, these provisions have a static cost of $51.8 billion in 2008, $623.8 billion from 2008-2012, and $1.965 trillion from 2008-2017.  Of course, this is based on flawed, static scoring and is not worth the paper it is written on.

Over the course of the next few days, I will be treating several of these in detail.  In particular, I will examine:

1. What provisions are set to expire in 2009 and 2010 from the Bush tax cuts?
2. How would the LSA/RSA/ERSA structure work, and how is it different from current law?
3. What can be done to improve the Bush health care plan?
4. How can compliance be done to prevent any tax leakage?