Eversheds Sutherland Tax Reform Law Blog
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White House Legislative Director Hopes for Bipartisan Support for Tax Reform Bill

Legislative Affairs director Marc Short, acknowledging that the reconciliation process leaves little room for error, stated that he is hopeful some Democrats, including members of the Blue Dog Coalition and the Problem Solvers Caucus in the House, as well as red state Democrats in the Senate, will support the passage of a tax reform bill.  Short expects that tax reform legislation will be drafted during the August recess with markups commencing immediately after Congress reconvenes in September, at which time the GOP will assess the potential for bipartisan support for the bill.  If...
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Senator Hatch Not Optimistic About a Significant Reduction in the Corporate Tax Rate

Senator Hatch, Senate Finance Committee chairman, said in an interview that it would be “kind of miraculous” to reduce the corporate tax rate to 25 percent, much less President Trump’s goal of 15 percent, and that Republicans will be lucky to get the rate down at all.  He also stated that tax reform success may require gaining Democratic support. Read more: U.S. Senator Hatch says 25 percent corporate rate a challenge in tax reform
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Senate Democrats Call for Bipartisan Tax Reform

In a letter to the President and GOP Congressional leaders, the 45 of the 48 members of the Senate Democratic Caucus urged abandonment of the reconciliation process in favor of bipartisan tax reform.  The Senate Democrats stated, however, that they would not support a bill that grants tax breaks to the wealthy or that adds to the deficit and thereby jeopardizes critical programs such as Medicare, Medicaid or Social Security. Senate Democrats set conditions for tax...
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Abandonment of Border Adjustment Tax may lead to Shallower, Shorter Tax Cuts

The GOP’s decision to abandon the controversial border adjustment tax (BAT) increases the chances that ensuing tax cuts will be both temporary and shallower than envisioned.  Without the BAT’s estimated $1 Trillion in revenue, and with no other plan to raise significant funds, analysts estimate the lowest possible revenue-neutral rate for corporate taxes is about 27%, significantly higher than either the White House or the House Republican’s Blueprint called for.  While the GOP has stressed its desire for permanent cuts, if the proposed tax bill is not revenue-neutral over the course of ten...
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House Ways and Means Committee Democrats Critical of Republicans’ Joint Statement on Tax Reform

In response to Congressional Republicans’ and the Trump Administration’s unveiling of their joint statement on taxes, several Democratic members of the House Ways and Means Committee issued condemnatory press releases: Ranking Member Richard Neal expressed his disappointment over the Republicans’ decision to exclude Democrats from the tax reform process, stating that partisan tax reform is doomed to fail.  Rep. Neal suggested that he and his fellow Democrats are ready to cooperate with Republicans to make tax reform a reality. Neal Statement on GOP Tax Reform Update Lloyd Doggett criticized...
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Joint Statement on Tax Reform Issued; BAT Abandoned

Today, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) issued a joint statement on tax reform that sets out a broad framework for moving forward on tax reform. Most notably, the statement announces that tax reform legislation will not include the controversial border adjustment tax (“BAT”) that has been championed by House Republicans.  The group has concluded that without the BAT...
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GOP to Release Tax Reform Framework

The top Republican tax negotiators are expected to unveil a broad set of agreed tax reform principles prior to the Congressional recess.  The anticipated framework is the result of ongoing deliberations between the “big six”:  Speaker of the House Paul Ryan, House Ways and Means Committee chairman Kevin Brady, Senate majority leader Mitch McConnell, Senate Finance Committee chairman Orrin Hatch, Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn.  While details are few, tax lobbyists are hoping the tax reform outline addresses key points of interest, including...
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President Trump Reiterates His Commitment to Lower Tax Rates on Corporations and Middle-Class Taxpayers

In a wide-ranging interview with the Wall Street Journal, President Trump stated that his next priority, after healthcare, was tax reform that lowers corporate rates and reduces the tax burden on middle-class families.  While he did not offer any new proposals on lowering individual tax rates, he stated that he was willing to consider taxing wealthier taxpayers more in order to offer a tax break to the middle class.  He also reiterated his goal of lowering the corporate rate to 15 percent. Read more: Trump Eyes Tax-Code Overhaul, With Emphasis on Middle-Class Break; Trump says tax reform...
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Opposition to Border Adjustment Tax Continues

Critics, including the House Freedom Caucus and the Koch-brothers-backed Freedom Partners, as well as the retail, oil refining, and auto industry sectors, remain resolute in their position that tax reform legislation should not include a border adjustment tax (BAT).  House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady remain the BAT’s strongest supporters, but apprehension exists that their continued stance could delay a vote on the House budget resolution containing reconciliation procedures the GOP is relying on to pass tax reform in the Senate with a simple majority.  Despite...
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Business Community Urges Congress to Pass Tax Reform

Corporate America is encouraging Congress to pass tax reform legislation as quickly as possible.  Amid apprehension that tax reform could experience delays similar to those facing other items on the Republican agenda, business leaders have pressed congressional leaders to move forward with a budget resolution to facilitate tax reform.  Business groups will launch campaigns during Congress’s August recess, aimed at lawmakers and the public, endorsing the need for lower tax rates for small businesses and corporations and more internationally competitive rates. Business groups push for quick...
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Senator Hatch Weighing Corporate Integration System; Former Treasury Officials Testify in Favor

The staff of Senator Hatch, Chairman of the Senate Finance Committee, is reportedly investigating a proposal that will permit a corporation to deduct 40% of the dividends it pays to shareholders.  Senator Hatch has previously promoted similar corporate integration measures—plans that eliminate or reduce the double taxation corporations face.  The proposal is reportedly being explored as an alternative to eliminating interest deductibility, as proposed by the House Republican’s Blueprint.  Interest deductibility is argued to favor debt over equity financing.  Senator Hatch’s plan would...
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Ways and Means Committee Hears Testimony on Simplifying the Broken Tax Code

On Wednesday July 19th, the House Ways and Means Tax Policy Subcommittee, led by Subcommittee Chairman Peter Roskam, held a hearing on tax reform, titled “How Tax Reform Will Simplify Our Broken Tax Code and Help Individual Families.”  The hearing focused on individual tax reform.   Subcommittee Chairman Roskam, in his opening statement, touted the introduction of a postcard-sized  individual tax return which eliminates all but two deductions and significantly reduces the number of tax brackets.  The prepared Opening Statement is available here. The witnesses offering testimony before the...
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Republicans Close to a Unified Tax Reform Framework

House Speaker Paul Ryan, addressing an audience at the New Balance shoe factory in Massachusetts, stated that White House and Congressional leaders are nearing agreement on a tax reform framework.  Speaker Ryan suggested that lowering the current corporate tax rate of 35 percent to a 20 percent rate, through the closing of loopholes and special interest deductions, is a realistic goal.  He did not mention the border adjustment tax as a means to pay for lower corporate tax rates, which may indicate that the House GOP is conceding the controversial proposal. Ryan says us tax reform consensus...
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House Committee Approves 2018 Budget Resolution

The House Budget Committee, with members voting along party lines, voted to send the recently introduced budget resolution to the House floor for consideration by the full chamber.  Opposition is anticipated not only from Democratic members, but also from within the GOP rank and file, with Republican moderates disagreeing with the proposed steep cuts and Republican conservatives arguing that the cuts are not large enough.  Both the House and the Senate must approve the measure to access the reconciliation process, which would allow the passage of tax reform in the Senate by majority vote. ...
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White House Reconsidering Corporate Tax Rate Goal

The Trump Administration, according to White House officials and advisors, is considering a corporate tax rate of 20 percent to 25 percent.  While this estimate is higher than the 15 percent rate set forth in the Administration’s one-page tax proposal issued in April, one senior administration official explained that the April figure was a starting point for negotiations, with the ultimate goal of a corporate tax rate near 20 percent.   President Trump is expected to begin campaigning in support of a unified Republican tax reform plan next month, which White House and Congressional leaders,...
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