Featured Articles

Senate Republicans to Get Tax Bill Details November 9

Posted on November 9, 2017 by David van den Berg, Dylan F. Moroses

All non-taxwriting Senate Republicans are scheduled to learn the details of the Finance Committee’s tax reform proposal November 9, according to Republican Whip John Cornyn of Texas.

When asked if the Senate Finance Committee would delay the release of its bill if the House Ways and Means Committee substantially changes its proposal, Cornyn said November 8, “It doesn’t make any difference what they do.” The Ways and Means Committee continued marking up its tax legislation, the Tax Cuts and Jobs Act (H.R. 1), November 8.

“I know we’ve got a meeting tomorrow to walk through the legislation, all Republicans,” said Sen. Bob Corker, R-Tenn. “As to when they actually send out copies to everyone else I don’t know.”

Finance Committee Chair Orrin G. Hatch, R-Utah, deflected several questions about the timing and details of the Senate tax bill. However, a committee spokesperson said in a statement that the bill should be expected “later this week,” and the committee continues work on it. The Senate plan will be released “in the form of a conceptual mark” combined with Joint Committee on Taxation tables, the spokesperson said, adding that the full proposal will follow “standard committee procedure” and not include legislative text.

Finance Committee Republicans John Thune of South Dakota and Rob Portman of Ohio both told reporters it remains unclear whether the Senate product would include a permanent, immediate corporate tax rate reduction to 20 percent or a phase-in to that rate.

Thune said that while the Senate’s bill would be different from the House plan in some aspects, the Senate followed “the contours of the House bill fairly closely on some issues.” Thune did not specify which issues the House and Senate bills would differ on, but he did say he hopes “we’ll have a final product to share tomorrow.”

Neither the House nor the Senate is scheduled to be in session November 10.

Cornyn also said Senate taxwriters have discussed including a repeal of the Affordable Care Act’s individual mandate in their measure, but no decision has been made.

The Congressional Budget Office reported this month that repealing the individual mandate would result in a $338 billion decrease to the federal deficit over a decade, if the current ACA taxes, subsidies, and cost-sharing reduction remain in law.

House Ways and Means Committee Chair Kevin Brady, R-Texas, has asked the JCT for an updated score regarding repeal of the individual mandate, but has yet to determine whether the language would be included in the House bill. House Republican Study Committee Chair Mark Walker, R-N.C., told Tax Analysts he thinks inclusion of that provision has a 50-50 chance, noting that he and several others are “strongly advocating for it.”

 Differences Between the Bills

Concerns about differences in tax simplification between the House and Senate tax reform bills came up during a November 8 meeting with a “cross-sectional” group of lawmakers and Senate Majority Leader Mitch McConnell, R-Ky., according to Walker.

“There are four or five major issues and things that we’re looking at,” Walker said. “I don’t think one or two is strong enough to deter us or get us off the track of where we want to go. But if there are four or five concerns not met that we believe are important in the House it might be where all bets are off.”

The Senate’s bill could feature a one-year delay in corporate tax cuts, retention of the seven current tax brackets, and complete repeal of the state and local tax deduction, The Washington Post reported late on November 7.

The biggest concern is not detracting from “the middle- and lower-income tax relief that we’ve talked about,” Walker said. “We want to see what their numbers are,” he added.

Both Walker and Rep. Mark Meadows, R-N.C., said significant differences between the House and Senate tax reform bills could make for a heated exchange when conference committees work to resolve those differences.

Asked about the Senate’s reported plan to delay implementation of the corporate rate cut by one year, Treasury Secretary Steven Mnuchin said on Bloomberg TV that it’s the Trump administration’s “strong preference” that a corporate rate cut be effective in 2018. “The longer we wait, the worse it is for the economy and making companies competitive,” he said.

But Mnuchin acknowledged that any delay would be in response to the Senate’s budget rules and would not be an indication of philosophical differences with the White House. “I’m sure that they’d like to start this as soon as they can,” he said of the corporate rate reduction.

Could Election Results Affect Tax Reform?

Mnuchin also dismissed the idea that the November 7 election results — which saw Democrats win the governorships in New Jersey and Virginia and win several other state and local races — might change Republicans’ strategy on taxes. “I think there’s very big support for middle-income tax cuts, which is a big part of the focus of our president, and making the business tax system competitive with the rest of the world. That’s what this is all about,” he said.

House Speaker Paul D. Ryan, R-Wis., agreed that the recent election results don’t change the environment for tax reform, during a Washington Examiner event November 8.

“It doesn’t change my reading of the current moment; it just emphasizes my reading of the current moment, which is we have a promise to keep and we’ve got to get on with keeping our promise,” Ryan said. “And one of the chief promises we made when we ran for office — all of us, whether it’s the president or Congress — in 2016 was that we would do tax reform and tax cuts for families, for people.”

Senate Minority Leader Charles E. Schumer, D-N.Y., told reporters during an off-camera briefing that Republicans need to recognize the November 7 election results, and turn away from their tax reform proposal. He noted that “suburban communities are hurt most by this tax plan,” and they were “the ones who voted last night.”

Sen. Tim Kaine, D-Va., considered the Virginia governor’s race a failed trial run for Republicans’ plans to reduce the tax burden most for high-income individuals and corporations. He noted that GOP candidate Ed Gillespie “ran on a tax cut,” and that the reform proposals to eliminate incentives like the work opportunity tax credit and deductibility of state and local income taxes would significantly affect Virginians.

Wesley Elmore and Asha Glover contributed to this article.

Follow David van den Berg (@TAtaxDavidVDB) and Dylan F. Moroses (@DMoroses3244) on Twitter for real-time updates.