Tax reform legislation can clear Congress by Christmas Eve, the Republican chief deputy whip for the House predicted October 11.
“I am optimistic that we [will] get this done,” Rep. Patrick T. McHenry, R-N.C., said at a Financial Services Roundtable event. “And I do think if you had to pick a date by which we pass it through the House and the Senate, it would be December 24.”
House Speaker Paul D. Ryan, R-Wis., has repeatedly committed to having updated tax laws in place by January 1, 2018. House Ways and Means Committee Chair Kevin Brady, R-Texas, said October 10 that he plans to produce tax reform legislation shortly after Congress finishes work on a fiscal 2018 budget resolution, though he declined to give details. On October 7 Ryan predicted that tax reform legislation would pass the House in October.
McHenry added that he and Majority Whip Steve Scalise, R-La., have been hosting briefings with lawmakers to discuss their concerns, and the individual tax code has been a primary focus. “The greater concerns are around the individual code and provisions built into the individual code, surprisingly,” he said. “Less conversation around the big architecture around C corps.”
McHenry added that he believes the specifics of the individual code and passthroughs could present the largest challenges in reaching a consensus on tax reform legislation, instead of corporate reform issues such as interest deductibility. “In order to simplify the individual code, you have to make serious decisions,” he said.
“I think building back in complexity in the individual code is the greater risk,” McHenry warned. “So though the corporate code is more complex than the individual code, the complexity built into the individual code has political benefits — maybe not economic, but political benefits” that could prove more important for lawmakers, he said.
GOP Tax Reform Details Trickle Down
A senior Republican on the House Ways and Means Committee suggested October 11 that an alternative minimum tax may be a necessary component of a proposed shift to a territorial system of international taxation, which is one pillar of the unified GOP tax reform framework.
House Ways and Means Health Subcommittee Chair Patrick J. Tiberi, R-Ohio, told reporters he believes an alternative minimum tax is required in a territorial system. He added that Republicans on the taxwriting panel largely understand and agree, but support for the provision could face obstacles outside of the committee.
“I think it’s always more difficult to get members to embrace issues they haven’t had a lot of time [with], whatever the subject,” Tiberi said. “Whether it’s another complex law or tax law, I think it’s always a challenge — not just that provision.”
On another note, House Ways and Means Committee member Kristi Noem, R-S.D., told Tax Analysts that she is confident that families on the low end of the income scale will be better off under the GOP unified tax reform framework.
“We are actually raising thresholds for the 0 percent bracket, and we are raising wage thresholds at the 12 percent level. A lot of those individuals haven’t itemized as well, so I think we’re going to be in a good spot. We wouldn’t have proposed it if we hadn’t done our homework on that,” Noem said.
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Dylan F. Moroses and Stephen K. Cooper contributed to this article.