“In the midnight hour…” The Senate narrowly approved its budget resolution last night along partisan lines, 51 in favor, 49 against. The $4 trillion fiscal plan allows the Senate to pass a filibuster-free $1.5 trillion tax cut over ten years but it still must be reconciled with a very different House version. Senator Bob Corker decried the process as a hoax: “The only thing about this that matters is preparation for the tax reform….We have no mechanism to control real spending, 70 percent of which is mandatory, that’s not even covered by this [budget].”
“I can feel your power.” Trump will visit Senate Republicans on Tuesday. The president will travel to the Capitol to meet with the Senate GOP caucus.He’s likely to use the opportunity to pitch a tax bill. The measure may not include a favorite idea of Finance Committee Chair Orrin Hatch—ending the double taxation of corporate dividends. Although Hatch has been working on the idea for years, he now says he may not include it in his version of a tax bill. “It’s not a given,” he says.
Not quite “like a prayer” for a corporate tax cut. Public support for a big corporate tax plan isn’t a given, either. TPC’s Howard Gleckman looks at how public opinion is lining up—and there is little clamor for middle-income tax cuts and outright hostility to corporate tax cuts.
You know he won’t "take you there.” In a remarkable development, Rep. Pat Tiberi, a senior House Ways & Means Republican who might have become the panel’s next chairman, will resign from Congress by Jan. 31, 2018. He’ll head the Ohio Business Roundtable. Tiberi has served in Congress for 17 years.
“Everyone must stand alone.” Canada’s Finance Minister Bill Morneau withdrew a tax proposal that would have targeted high earners. The plan would have limited a person’s ability to convert money held in a private corporation to lower-rate capital gains. Morneau withdrew the plan in the face of public scrutiny about whether he would benefit from a proposal he made last year that would have changed pension laws.
“I hear you call my name.” In the wake of President Trump’s apparent decision to withdraw support for a plan to extend Affordable Care Act cost-sharing reduction subsidies, Senator Lamar Alexander thinks it’s about time the GOP abandons its effort to repeal and replace the ACA and focus on a temporary fix. “I would ask what’s conservative about unaffordable premiums? What’s conservative about creating chaos so millions can’t buy health insurance?” Two dozen senators said they’d cosponsor the bill put together by Alexander and Democrat Patty Murray.
“And it feels like home.” TPC hosts IRS Commissioner John Koskinen as its Distinguished Speaker on Tuesday, October 31. The second event in TPC’s new series begins at 9:30 am. Koskinen will join TPC director Mark Mazur to reflect on Koskinen’s four years at the IRS and address challenges facing tax administration. Koskinen will be introduced by former IRS commissioner Charles Rossotti, who served from 1997 to 2002. Register here to attend in person or view the live webcast here.
“Just like a muse…” TPC’s Gene Steuerle and Signe-Mary McKernan and Caroline Ratcliffe of the Urban Institute make the case that tax reform should promote saving among households with less wealth. Some simple reforms could make big improvements: Limit the mortgage interest tax deduction and use the revenues to create a credit for first-time homebuyers; establish automatic savings accounts and universal children's savings accounts; reform safety net program asset tests that are sometimes barriers to saving by low-income families; promote emergency savings; and reduce reliance on student loans while supporting success in postsecondary education.
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