The U.S. House of Representatives last week passed H.R. 8, which is a bill that extends the so-called Bush tax cuts through 2013. Passage of H.R. 8 was expected as part of the Republican-controlled House’s legislative agenda to avoid any tax increases for another year.

Without Congressional action, all of the Bush tax cuts are scheduled to expire on Dec. 31, 2012. The Obama administration and Congressional Democrats favor extending the Bush tax cuts for everyone making less than $200,000 ($250,000 for couples). In the short run, this is likely to be one of several contentious points Republicans and Democrats will fight over as the country approaches what is being called the "fiscal cliff" at the end of 2012.

Another piece of legislation passed in the House last week, H.R. 6169, provides a blueprint for how House Republicans will approach fundamental tax reform in the 113th Congress, which will convene in early January 2013. H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012, is designed to provied a justification for a comprehensive rewriting of the tax code in 2013. In addition, the bill lays out a schedule for expedited consideration of a comprehensive reform package beginning with the House Ways and Means Committee reporting a bill no later than April 30, 2013.

The goals of H.R. 6169 are to reform both corporate and individual tax rates by eliminating tax preferences that allow many individuals and corporations to essentially pay no federal income taxes. The bill also creates a territorial system that would allow U.S. corporations to bring profits made from overseas operations back to the U.S. where they can be invested in the U.S. economy.

The bill sets a target of 25 percent for the top individual and corporate rate. However, these rates can only be achieved by eliminating tax preferences or so-called tax expenditures in the code that the bill says create a drag on economic growth and job creation, effectively keeping markets from directing economic resources to their most efficient uses, instead allowing the government to direct resources to other uses.

“H.R. 6169 is the first step in what could prove to be one of the most important legislative accomplishments of the last 50 years,” says Chris Wehrman, American Rental Association (ARA) CEO. “This is a game-changer because this bill basically eliminates the current code — and all of the political baggage associated with it — and puts the focus on creating a fairer, flatter and more broad-based tax system that will promote economic growth. ARA will continue to follow this process carefully in the hope that Ways and Means Chairman Dave Camp (R-Mich.) is successful in reforming our antiquated tax code.”