Eversheds Sutherland Tax Reform Law Blog
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“Trick or Treat?: Top House Republicans Discuss Timing for Release of Tax Reform Bill”

Yesterday, Rep. Mark Meadows, Chairman of the House Freedom Caucus, revealed that he has been promised that the text of the tax reform bill will be published by November 3rd; he expects a vote on the legislation prior to Thanksgiving. Rep. Kevin Brady, chairman of the House Ways and Means Committee that is currently drafting the legislation, offered a less-specific timeline, saying only that a draft would be released “shortly.” Rep. Brady noted that the timeframe for the passage of the tax reform bill has been accelerated in light of the House’s anticipated vote to adopt the Senate’s version...
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President Trump Urges House Republicans to Adopt the Senate-Approved Budget to Speed Up Tax-Reform Process

President Trump and Vice President Mike Pence urged House Republicans on a conference call yesterday to speed up the tax reform process by adopting the Senate-approved budget without further amendments. The chairwoman of the House Budget Committee, Rep. Diane Black, as well as Speaker Paul Ryan also voiced their support for the passage of the Senate budget this week. The end of this year remains Speaker Ryan’s target for the adoption of tax reform. The president plans to meet with Senate Republicans tomorrow. Read more:  Trump urges House to speed up process to pass tax...
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Senate GOP Passes Amendment to Repeal State and Local Tax Deduction

With a 52-47 vote, Senate Republicans passed an amendment to the budget resolution to repeal the state and local tax deduction, which allows federal filers to deduct taxes paid for their real estate, personal property, state income, and sales taxes.  The measure is expected to raise $1.3 trillion over the next ten years.  Opponents of the move are critical of the fact that only individual filers are affected, and that corporations will still be allowed to take advantage of the deduction. Senate votes to eliminate state and local tax...
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Senate Approves Budget, Easing Path Toward Tax Reform Legislation

The Senate approved a budget for 2018 with language permitting a simple majority vote on tax legislation through reconciliation. The budget language allows tax legislation to add up to $1.5 trillion dollars to the deficit over a decade, which the budget blueprint balances by assuming greater economic growth, cuts in spending and an accounting method that does not include Social Security. With Republican control of the Senate, the budget resolution allows for the passage of tax reform legislation without any votes from Senate Democrats. The Senate budget blueprint will now be voted on by the...
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McCain Announces Support for Budget Resolution

Sen. John McCain buoyed GOP tax reform hopes by announcing his support for the Senate budget resolution, set for a vote later this week.  Debate on the resolution began midday Tuesday following a 50-47 vote, split along party lines, to move the process forward.  While Sen. John Thune expressed optimism toward passing the resolution, some Senate Republicans remain uncommitted, including Lisa Murkowski, Susan Collins, Bob Corker, and Rand Paul, the latter of whom vehemently opposes the measure unless substantial spending cuts are included in its language. Statement by SASC Chairman John McCain...
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Trump Tempers Tax Reform Timing Expectations

President Trump and Senate Majority Leader Mitch McConnell, at an October 16th White House news conference, acknowledged that the tax code rewrite may not occur by year’s end, though the goal remains to accomplish reform in 2017.  With the release of a detailed tax plan still pending, Republicans are faced with disputes regarding how to tax corporations, the fate of the estate tax, and how to pay for the reform plan, as well as an interparty struggle over the proposed repeal of the state and local tax deduction.   Speaker Paul Ryan, however, remains optimistic, predicting the House will pass...
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Senate Republicans to Vote on Fiscal Year 2018 Budget

Senate Republicans anticipate voting on the fiscal year 2018 budget this week, allowing their tax plan to add up to $1.5 trillion to the deficit over the next ten years.  The resolution will also contain provisions allowing the GOP to pass the tax reform bill, promised to be brought to the floor by year’s end, by a simple majority and avoid a Democratic filibuster in the Senate.  While it is expected that Senate Republicans will be able to pass the budget based on their slim majority, there is little room for party defections, particularly as Sen. Rand Paul (R-KY) is likely to oppose the...
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Senate Finance Committee Holds Hearing on International Tax Reform

Led by Chairman Hatch, the Senate Finance Committee held a hearing on international tax reform, following the release of the Republican tax reform framework. The hearing and witnesses focused on the competitive disparity between foreign multinationals and domestic multinationals. The witnesses differed on whether a switch to a territorial system or stronger earning stripping provisions were the appropriate response. Bret Wells, the George R. Butler Professor of Law at the University of Houston Law Center Mr. Wells began by highlighting Senator Hatch’s commitment to corporate integration and...
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Administration Official States that Repatriation Tax Will Be in the 10% Range

National Economic Council Director Gary Cohn stated on Sunday that the Trump administration has proposed taxing profits accumulated offshore in the “10 percent range.” The tax reform framework released on September 27 stated that there would be two rates for the repatriation tax, with cash taxed at a higher rate than illiquid assets, but did not specify an amount. Cohn did not indicate which rate the proposed 10 percent would apply to and emphasized that Congress would ultimately determine the precise rates. Cohn Says Repatriation Tax Rate Will Be in the ‘10%...
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GOP Releases Tax Reform Framework

The White House and Congressional Republicans have released the Unified Framework for Fixing Our Broken Tax Code. The goals for the Framework, which is described as a template for the tax-writing committees, include providing tax relief for the middle class; simplifying the tax filing process; providing tax relief for businesses (with an emphasis on small businesses); ending incentives to send jobs, capital, and tax revenue overseas; and broadening the tax base, in part by ending special interest tax breaks and loopholes. For US businesses, the Framework: Reduces the corporate tax rate to...
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Tax Reform Blueprint Expected to Include 25% Tax Rate for Pass-Through Entities

The GOP tax reform framework is expected to include a new 25% tax rate for “pass-through” businesses, so named because profits and losses transfer directly to the entity’s owners.  Income earned through pass-through businesses is currently taxed at individual income rates as high as 39.6%.  President Trump is scheduled to announce his tax reform plan, which will also include specific tax rates for individuals and corporations, on Wednesday, September 27th, according to White House spokesperson Sarah Sanders. Republican tax plan expected to include new...
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Aspects for GOP’s Tax Overhaul Plan Leak

The Republican tax reform blueprint, due to be released this week, will propose a corporate tax rate of 20 percent, according to three insiders with knowledge of the plan, speaking on the condition of anonymity.  In addition, the plan will call for full-expensing, allowing companies to immediately and fully deduct capital expenses.   However, the full expensing benefit will be temporary, terminating after five years due to the cost.  While the provision could result in an initial growth in business investment, its relatively short duration may hamper long-term planning. GOP eyes corporate...
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The GOP Readies Tax Reform Pitch

President Trump, learning from the administration’s failure to engage conservative groups during its attempt to repeal Obamacare, will host leaders from several conservative grass roots organizations on Monday, September 25, to rally political allies around his tax reform plan.  On Wednesday, the House Republican Conference will conduct a half-day retreat focused on effectively presenting tax reform to constituents.  The goal of the meeting is to prevent fracturing among the Republican Party by providing ample opportunity to discuss the framework for tax reform, ask questions and offer...
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Senators Corker and Toomey Reach Tentative Budget Resolution Deal

Bob Corker and Pat Toomey, GOP members of the Senate Budget Committee, have reached a tentative agreement on a budget resolution that would allow for tax cuts that would significantly increase the deficit as determined using static scoring.  While the Senators did not specify the size of the potential deficit increase, Senator Ron Johnson indicated that he would support an amount of at least $1.5 trillion, up to $3 trillion, over a ten-year period.  The budget resolution is of particular importance as it is a necessary step toward unlocking the reconciliation process through which...
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Hatch Touts Corporate Integration at Tax Reform Hearing

Senate Finance Committee Chairman Orrin Hatch, during his opening statement at the committee’s Hearing on Business Tax Reform on September 19, stated that he continues to support his corporate integration proposal, which would allow U.S. businesses to deduct shareholder dividend payments from their taxable income in order to resolve the perceived double taxation, at the corporate and shareholder levels, on corporate earnings.  Chairman Hatch views corporate integration as a complement to, rather than a substitute for, corporate tax rate reduction. Senate Republican tax chief wants dividend...
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