Loopholes and Waste Act of 2013

LAW Act of 2013 Brett Heinz Section I Duplicate Government Programs

Either eliminate or the consolidate of all of the duplicative programs identified in the annual General Accountability Office report Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits over a period of five years, overseen by the Office of Management and Budget. Take steps to prevent the creation of future duplicate programs.

Section II Strategic Sourcing

Have the Office of Management and Budget set a government-wide standard for the percentage of goods and services acquired through strategic sourcing, increasing over a period of no more than ten years, to eventually reach one hundred percent.

Section III Tax Loopholes

End tax deductions for Business Entertainment Expenses. Require taxpayers using the LIFO method to value their inventory to transition to the FIFO method. Ban usage of subnormal goods inventory accounting methods, including the LCM method. Extend the one million dollar limit on the tax deductibility of executive pay to performancebased compensation. Require any gains or losses from a 1256 contract as short-term capital gains or losses. Require stock option-based compensation to be treated identically on tax returns and a companys records. Report compensation for hedge fund management services as taxable income. Replace state and local government tax-exempt bonds with Build America Bonds. Tax flow-through income of S Corporations with three or less shareholders as executive compensation.

Section IV Tax Havens

Take various steps to prevent the use of offshore tax havens, including the strengthening of enforcement, penalties, and investigation.

 Treat swap payments originating in the United States as taxable income. End the ability of companies managed and controlled within the United States to claim foreign status on earnings. Require corporations in the United States to disclose revenue and tax information on a countryby-country basis to Internal Revenue Services. Determine foreign tax credits on a pooling basis. Defer corporate tax deductions for expenses related to deferred income. Treat excess income from transnational intellectual property transfers as taxable income. Repeal the entity classification election for foreign entities. Repeal the CFC look-through rule. Various other changes to United States tax code and collection involving the use of tax havens.

Section V Fossil Fuel Subsidies

Eliminate the Dual Capacity Tax Preference. Exclude oil companies from the Domestic Manufacturing Deduction. Modify the Intangible Drilling Cost Deduction so that it is only applicable for dry wells. Fully repeal the Percentage Depletion Allowance for fossil fuels. Require oil companies to capitalize the costs of tertiary injectants and recover costs over time. Eliminate Royalty relief for Outer Continental Shelf Deepwater Oil and Gas Production.

Section VI Military Overhead

Reduce usage of service support contractors by thirty percent over a period of three years. Reduce the personnel in the Office of the Secretary of Defense, COCOM, and other defense agencies. Realign geographic combatant commands. Consolidate the Army and Air Force Exchange Service, the Navy Exchange Command, and the Marine Corps exchange system under one organization. Close the Joint Forces Command. Various other changes to reduce the cost of administration for defense and national security.

Section VII Additional

Shift resources away from federal agencys travel budgets and focus on video conferencing with the intention of reducing travel costs by fifty percent. Cut United Nations funding by 25% End the United States Sugar Program