Eversheds Sutherland Tax Reform Law Blog
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House Republicans Remain Divided Over Border Adjustment Tax

With the GOP still looking for its first major legislative accomplishment under the Trump Administration, Conservative members of the House are calling for party leadership to abandon the proposed border adjustment tax in order to facilitate progress on tax cuts. Tim Phillips, president of the Koch-brothers backed “Americans for Prosperity” contends that House Ways and Means Committee Chairman Kevin Brady is alone in his resolve to include a border adjustment tax, the most significant impediment to reform, in any proposed legislation. Brady has stated that he is open to border adjustment tax...
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Heritage Foundation Supports the House Blueprint Without a Border Adjustment Tax

The conservative Heritage Foundation contends that the House tax reform Blueprint plan will successfully promote job creation and economic growth through lower corporate tax rates; immediate capital expensing; and the removal of special credits, deductions, and exemptions, without need for the controversial Border Adjustment Tax (“BAT”). The Heritage Foundation predicts the BAT would have a negative impact on GDP growth and states that it carries too much unnecessary risk for implementation. Time to Move Past the Proposed Border Adjustment...
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PIMCO’s Chief Investor Skeptical Tax Reform Agenda will be met

Pacific Investment Management Company, LLC ‘s global chief investment officer, Dan Ivascyn, doubts President Trump’s tax and regulatory reform will ultimately achieve his ambitious goals. Ivascyn predicts tax reform will feature cuts rather than broad-based policy changes, due in part to the White House’s and Congress’ focus on revenue. Additionally, his forecasted economic growth rate of 2.5% is more conservative than the Trump Administration’s 3% objective. Ivascyn Sees No Sweeping Tax Reform, Infrastructure...
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Senator Hatch States that White House, Senate and House Republicans are in Agreement on 80% of Tax Reform Proposals

Senate Finance Committee Chairman Orrin Hatch spoke at Bloomberg Global Transfer Pricing Conference on June 7, stating that the White House, Senate and House Republicans are in agreement on roughly 80 percent of the key issues. The Senator reiterated his commitment to lowering tax rates and shifting to a territorial system but noted that the proposals were still in the planning stage and that nothing, including the House Republican’s Border Adjustment Tax proposal, was off the table. Senator Hatch also stated that while he didn’t believe revenue neutrality was a necessity for tax reform, he...
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House Freedom Caucus Calls for Summer Session to Address Tax Reform

House Freedom Caucus Calls for Summer Session to Address Tax Reform The conservative House Freedom Caucus is urging House leaders to forgo the summer hiatus and instead remain in session to progress tax reform. The group’s stance follows on the heels of news that President Trump would seek the support of Democrats to press his tax reform agenda. Freedom Caucus calls on Congress to work through summer recess to pass tax...
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Congress to Address Tax Reform in September

Tax reform will take center stage before Congress in September, according to White House Director of Legislative Affairs Marc Short.  While the Trump Administration favors revenue neutrality, its primary goal for reform is tax cuts.  President Trump is meeting with Congressional GOP leaders today to discuss his tax reform agenda. White House wants healthcare vote this summer, tax reform in fall
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White House Version of the Tax Bill Reportedly to Be Ready by Labor Day

Faced with growing Republican discontent over the Trump Administration’s lack of definitive tax legislation, White House economic advisor Gary Cohn projects that Congress will receive President Trump’s detailed tax proposal by the time Lawmakers return from the August recess. If delivered, the proposal would have to share attention with Congressional efforts to raise the debt limit and avoid a government shutdown. House Ways and Means Committee Chairman Kevin Brady is also reportedly in the process of drafting an alternative tax plan for Congressional and White House consideration....
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DeSantis Joins Growing Ranks of Republicans Opposed to Border Adjustment Tax

Ron DeSantis (Fla.), is the latest member of the House Republicans to come out against the border adjustment tax.  DeSantis argues that it is a major impediment to tax reform, speculating that its inclusion in reform legislation would not garner the necessary support from Congress or the White House.  DeSantis promotes pairing tax cuts and spending cuts to fund tax reform and argues revenue neutrality is not necessary. GOP rep: Border-adjustment tax could ‘sink’ tax...
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Treasury Secretary Mnuchin Says Pass-through Rate Cut Not for the Wealthy

On May 18, Treasury Secretary Mnuchin attempted to assuage fears that the Trump tax plan will favor the wealthy. Trump’s tax reform outline proposes a 15% tax rate on business income, including income of individuals derived from pass-through entities, which is currently subject to a top marginal rate of 39.6%. While the outline includes few details, some commentators have expressed concern that the change will provide outsized benefits to the top 1% of households and the largest, most profitable pass-throughs. Responding to a question by Senator Elizabeth Warren regarding the pass-through...
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States Dubious of 2017 Tax Reform

State officials’ concerns over holding special sessions and preparing for federal tax reform in 2017 are waning. Some believe that federal tax reform is unlikely to occur at all, pointing to the controversies enveloping the Trump administration, a partisan Congress, and prioritization of repealing and replacing the Affordable Care Act. Karl Frieden, vice president and general counsel of the Council On State Taxation (COST), while commenting that the true deadline for tax reform is likely the 2018 elections, posits that the implementation period following enactment of a federal tax law, even...
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Key Open Topics for Tax Reform

Chairman of the House Ways and Means Committee Kevin Brady and Speaker Paul Ryan concur that the White House and Republican members of Congress are eighty percent in agreement on tax reform legislation.  Issues constituting the remaining twenty percent include: 1) the permanence of tax reform, 2) individual and corporate tax rates, 3) the border adjustment tax, 4) full expensing or interest deductions for business investments, and 5) whether or not to pair tax reform with infrastructure. Read more:  Five tax reform issues dividing...
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Tax Reform for Christmas

Despite controversy surrounding the border adjustment tax proposal, House Speaker Paul Ryan hopes that Congress will present a tax reform bill to the president by the December 23rd recess. Treasury Secretary Steven Mnuchin shared the same goal earlier this week, stating that the objective is to accomplish tax reform by year’s end. Paul Ryan Wants to put Reform on Trump’s Desk by Christmas
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Brady Suggests Reports of Border Adjustment Tax’s Death Are Greatly Exaggerated

House Ways and Means Chairman Kevin Brady, acknowledging the dissension surrounding the border adjustment tax, remains stalwart that it is a “critical” component of the House GOP’s tax reform agenda. Chairman Brady reports working with the White House and the Senate to resolve opposition to the plan, projected to raise nearly a trillion dollars in revenue to offset a proposed corporate tax rate cut. Border Adjustment Tax is ‘Critical’ Part of Tax Reform, Chief GOP Tax Writer...
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Senate Republicans Offer No Alternative to Proposed Blueprint Revenue Raisers

Senate Finance Committee Chairman Orrin Hatch has suggested that the three revenue raisers (i.e., the border adjustment tax, elimination of certain itemized deductions and elimination of business interest deductions) proposed in the House Republicans’ Blueprint do not have support in the Senate, and he does not believe they will pass. However, Senate Republicans have yet to offer an alternative to these proposals. Without the elimination of some tax breaks, Congress will be unable to lower corporate or individual tax rates without increasing the federal deficit. Thus, the Senate may prove to...
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Former Speaker Boehner Does Not Believe Tax Reform Will Pass

During a keynote address at an energy conference, Former Speaker of the House John Boehner stated that his faith in the passage of tax reform was fading and referred to the House Republicans’ and Administration’s tax reform initiatives as a “bunch of happy talk.” Boehner also stated that he believes the border adjustment tax is dead and his odds for passage of tax reform, generally, are now 60/40. Read more:  Boehner: Tax reform is ‘just a bunch of happy...
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