Eversheds Sutherland Tax Reform Law Blog
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The ‘Big 6’ Are Making Progress on Tax Reform Framework

The White House and Congressional Republicans have reached broad agreement on several potential offsets to fund tax cuts, according to sources familiar with the negotiations.  Present options include capping the mortgage interest deduction, eliminating the state and local tax deduction, and eliminating the interest deduction for businesses.  Additionally, there is consensus among the decision makers, colloquially known as the “Big 6,” to include a mandatory deemed repatriation provision in any tax reform proposal.  The resultant corporate tax rate would likely fall between 22-25 percent with...
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Ryan to Promote Tax Reform in the Pacific Northwest

After events in Ohio, Washington, DC and Massachusetts, Speaker of the House Paul Ryan will promote tax reform in the Pacific Northwest this week.  He will address the benefits of reform, including lower taxes, less hassle, and a level playing field for all taxpayers, according to a spokesman for the Speaker, with the goal of getting Republicans back on track after President Trump’s controversial comments regarding the violence in Charlottesville, VA. Ryan heads West to pitch tax reform  ...
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President Needs to Focus on Tax Reform after Bannon Departure

Sara Fagen, the White House political director under George W. Bush, stated that President Trump needs to focus his administration on producing a tax reform package in the wake of Steve Bannon’s departure.  According to Fagen, who sees the Bannon exit as a positive, the President needs an accomplishment on his record, particularly in light of his response to the racially charged events in Charlottesville, VA.  While some Congressional Republicans have shied away from the President in recent days, there is still broad support for tax reform. With Bannon gone, one issue could get the White...
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GOP Fears President’s Volatile Relationships Could Jeopardize Tax Reform

President Trump’s declining relationship with his party and the business community could endanger passage of a tax reform bill.  House Ways and Means Committee Chairman Kevin Brady stated that tax reform, which he described as the “signature issue of this presidency,” can only succeed if the President “gets on board and stays on board.”  In the wake of distracting events and the dissolution of a pair of the President’s corporate advisory groups, conservative organizations are spending millions on media campaigns to create momentum for tax reform.  Congressional Republican leaders are hoping...
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Brady Expects Economic Growth to Offset Initial Deficit Increase

Speaking at the Reagan Ranch on Wednesday, August 16, 2017, Chairman of the Ways and Means Committee Kevin Brady announced that the GOP tax reform plan could significantly add to the deficit during the first few years of implementation, but that resultant economic growth would eventually offset any adverse effects.  While light on specific details, Chairman Brady mentioned that House Republicans were working with their Democratic counterparts to find common ground for tax reform.  A full video of the speech may be found here. GOP Chairman:  Tax reform could increase...
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Republicans Confident on Selling Tax Reform

The GOP believes it will have an easier time selling the American populace on tax reform than it did on Healthcare reform.  In order to elicit support, Republican lawmakers intend to emphasize the effects of tax reform policies on their constituents, including tax cuts, more jobs, more take-home pay, and a simpler tax code.  According to political strategists, stripping tax preferences for special interests from the tax code and explaining how tax reform will improve the job market for everyone will help counter Democrats’ arguments related to wealth inequality and favoritism. GOP thinks it...
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September to be a Crucial Month for the Trump Administration

In September, the White House and Congress will have to address the debt ceiling, the federal budget, tax reform, and possibly another effort to repeal Obamacare.  White House aides have been negotiating these issues in New York while formulating plans to curb the President’s lofty expectations over the complicated, and likely bitterly contested, matters.  Tax reform is a primary focus, with several members of the Trump administration intent upon quickly resolving budget matters and moving to the topic.  President Trump, who has publicly expressed his frustration with Senate Majority Leader...
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GOP Considers Hybrid Approach to Tax Reform

Congressional tax committee members and the White House are discussing tax reform that combines permanent revisions to the tax code with temporary rate cuts for individuals and businesses.  The proposal is a potential solution for Republicans if the party opts to utilize the reconciliation process, which limits the life of tax cuts adding 10 years to the federal deficit. (The effect of lowering the corporate tax rate to 15%, elimination of several tax brackets and doubling the standard deduction, as set forth in the White House’s tax plan released in April, would result in the estimated loss...
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Republican Tax Reform Framework, but No Legislation, Reportedly Coming in September

Sources indicate that the Trump administration expects the “Big Six” will release a short three- to five-page document in September outlining a plan for reforming the US tax code. The document will likely not be accompanied by legislation, previously targeted for September, but instead could serve to outline areas of agreement between the White House, Senate, and Congress. Neither the House Ways and Means Committee nor the Senate Finance Committee—the congressional committees charged with drafting tax reform legislation—have set a deadline for passing tax legislation. However, a White House...
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Republicans Divided Between Tax Reform and Tax Cuts

Facing a low presidential approval rating, failed health care reform, and impending midterm elections, the GOP wants to move quickly on tax legislation but is undecided on the actual package to present.  Some Republicans support scaling back reform to focus on tax cuts, in the hope of avoiding drawn out negotiations over eliminating tax expenditures and closing loopholes.  Other party members, including House Speaker Paul Ryan, Sen. John Thune, as well as the White House, favor comprehensive tax reform, believing that tax cuts fall short of the overall goal.  Two items Republicans do agree...
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White House Amenable to Bipartisan Tax Reform

White House officials, unwilling to repeat the Obamacare repeal failure and keenly aware of intraparty dissidence, have been discussing tax reform with House Democrats.  Treasury Secretary Steven Mnuchin and chief economic advisor Gary Cohn have been meeting with members of the House’s Blue Dog Coalition and the bipartisan Problem Solvers Caucus to drum up support for reform.  While the White House endorses a cross-party approach to tax reform, director of legislative affairs Marc Short said the decision on how to proceed ultimately lies with Congressional Republicans, a nod to Senate...
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Senate Budget Committee Considers Appropriate Baseline Measure

Senate Budget Chairman Michael Enzi confirmed that he intends to mark up a fiscal 2018 budget resolution in September.  First, however, the Budget Committee will need to agree on how to measure the resolution, using either the current policy baseline or current law baseline.  The former method, which reduces projected federal revenue by approximately $460 billion over 10 years, assumes expiring tax cuts will be renewed.  In contrast, the current law baseline, which is used by the Congressional Budget Office, treats tax cuts as if they will expire on schedule.  While several Senate GOP...
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Cohn Calls for Sub-23% Corporate Tax Rate

White House economic advisor Gary Cohn stated that the US must reduce the tax rate for corporations and pass-through entities below 23%.  He indicated such a rate is necessary to encourage domestic corporations to keep their profits in the US by competing with corporate tax rates offered by most member countries of the Organisation for Economic Co-operation and Development (OECD).  Cohn reaffirmed the GOP’s fall deadline for completion of a comprehensive tax reform bill. Cohn Says Tax Writers Have to Get Corporate Rate Below...
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Meadows Cites Thanksgiving Deadline for Tax Reform

House Freedom Caucus Chairman Mark Meadows, speaking at an Americans for Prosperity event, stated that “if [the tax reform bill] doesn’t get to the president’s desk by Thanksgiving… it isn’t going to happen.”  He explained that the timing is imperative in order to retroactively apply tax reform benefits to 2017 and to avoid the legislative slowdown often associated with midterm election years.  Meadows also called for a corporate tax rate somewhere in the teens and stated that he would support extending the budget window to allow for longer-lasting tax cuts. Freedom Caucus chairman wants...
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McConnell Confirms Intent to Use Budget Reconciliation to Pass Tax Reform

Senate Majority Leader Mitch McConnell, in response to the Senate Democratic Caucus’s August 1st letter urging bipartisan tax reform, stated that the GOP will need to utilize the reconciliation process to avoid a Senate filibuster.  He suggested that the demands set forth by Senate Democrats indicated that they did not share Republican priorities regarding tax reform.  However, McConnell did leave open the possibility of courting support from the three Democratic Senators who did not endorse the letter.  McConnell stated that both chambers of Congress would hold tax hearings after the summer...
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