Tax reform and transparency headline TEI's 61st midyear conference.

• Position: Conference news

TEI members and guests gathered in Washington, D.C., this spring from April 3 to 6 to attend the Institute's 61st Midyear Conference. Budget negotiations in the U.S. Congress, which threatened to shut down the federal government within days of the conference, cast a shadow over the conference, which focused on an array of tax reform proposals and new compliance requirements. The 500 registrants heard from top-notch practitioners, seasoned tax executives, and key government officials who helped explain many of these complicated new rules including recent changes to withholding provisions, the new Schedule UTP, and a variety of other international, Canadian, and state and local issues.

TEI President Paul O'Connor of the New England Chapter opened the conference on Monday morning, introducing a plenary session on corporate tax reform. "The tax and management challenges facing in-house tax executives today remain robust and challenging," said Mr. O'Connor. "The business tax environment is and will continue to be in a state of flux. In recent months, the volume and intensity of the tax reform debate has increased. Accordingly, in-house tax professionals must consider not only what the tax code looks like today but what it could look like in the years ahead." Styled "Hard Realities and No Easy Choices," the session set the tax reform stage with a thorough and entertaining discussion of the current global tax landscape. "We ought to look at what other industrialized countries are doing before embarking on fundamental tax reform," explained Peter Merrill of PricewaterhouseCoopers LLP. "Otherwise, we might wind up with our capital and income finding other shores." Those other shores may include member countries of the Organisation for Co-operation and Economic Development whose average corporate tax rate of 25 percent is much lower than that of the United States.

Mr. Merrill's fellow panelists--Pamela Olson of Skadden, Arps, Slate, Meagher & Flom LLP and Martin Sullivan of Tax Analysts--agreed that the U.S. tax system will inevitably move closer to those of other OECD countries adding that some form of value-added tax will likely be needed to supplement existing revenue sources. Although Congress has publically taken the VAT concept off the table, "something impossible has to happen" in order to achieve a sustainable economic future for the country, commented Mr. Sullivan. C.N. "Sandy" Macfarlane of Chevron Corporation, who moderated the session, closed the discussion with a few ideas for how in-house tax executives should approach the tax reform debate. "In-house tax people should examine the various proposals and determine how they would affect their businesses," he offered. "Look at the tax...