September to be a Crucial Month for the Trump Administration
Posted on Aug 14, 2017
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
Posted on Aug 14, 2017
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
Posted on Aug 14, 2017
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
Posted on Aug 11, 2017
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
Posted on Aug 11, 2017
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
Posted on Aug 8, 2017
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
Posted on Aug 7, 2017
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 23%
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Meadows Cites Thanksgiving Deadline for Tax Reform
Posted on Aug 4, 2017
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
Posted on Aug 2, 2017
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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White House Legislative Director Hopes for Bipartisan Support for Tax Reform Bill
Posted on Aug 2, 2017
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
Posted on Aug 2, 2017
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
Posted on Aug 2, 2017
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 reform
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Abandonment of Border Adjustment Tax may lead to Shallower, Shorter Tax Cuts
Posted on Jul 31, 2017
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
Posted on Jul 28, 2017
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
Posted on Jul 27, 2017
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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