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51 Infrastructure 1 (2011-2012)

handle is hein.journals/infrastr51 and id is 1 raw text is: ABA  SECTION OF PUBLIC UTILITY, COMMUNICATIONS AND TRANSPORTATION LAW


Debt Ceiling Debate Portends
Corporate Tax Reform
By David R. Hardy and Martha Groves Pugh

midst the intense partisan bickering of the sum-
mer months over the increase in the national
debt ceiling, few areas of consensus or even
compromise emerged. However, some of the announced
possibilities for a compromise included increased tax
revenues generally relying upon the recommendations
of the Simpson-Bowles bipartisan The Moment of Truth,
Report of the National Commission on Fiscal Responsibil-
ity and Reform (hereinafter, the Simpson-Bowles Report
or report) released in December 2010.1 The top Repub-
lican leadership expressed at various times its willing-
ness to consider corporate tax reforms based upon the
Simpson-Bowles Report recommendations: corporate tax
simplification through a reduction of spending hidden
in the tax code, which the report refers to as a reduction
in tax expenditures, and then a reduction in corporate
tax rates.2 The final debt ceiling compromise signed into
law on August 2, 2011, left many of the specifics of debt
reduction for determination by a future congressional
panel. It is by no means certain that corporate tax reform
could be
enacted prior
to the upcom-
ing national
elections in
2012. Nonethe-
less, regulated
industries such
as those repre-
sented by the     David R. Hardy    Martha Groves Pugh
David R. Hardy is a partner with Osler Hoskin & Harcourt LLP
in its New York office where his focus is corporate and interna-
tional tax law. Martha Groves Pugh is counsel in McDermott
Will & Emery LLPs Washington office with an emphasis onfed-
eral income tax issues.

membership of the Public Utility, Communication and
Transportation Law section would do well to consider
the recommendation of the Simpson-Bowles Report and
the effect that such enactment might have on their busi-
ness, revenues, and financial statements.
Deficit Debate
In the deliberations regarding the increase in the national
debt limit, considerable attention was given to the impor-
tance of balance in the reduction of entitlement programs
coupled with new revenue sources. While the far right
members of the Tea Party movement were averse to any
deficit reduction funded by a source other than reduction
in government spending, the more moderate elements
continued on page 8

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