Here are eight reasons tax reform is harder than health reform. TPC’s Howard Gleckman reminds us why tax reform hasn’t happened in over 30 years: It’s difficult, complicated work. Consider the issues of revenue, winners vs. losers, nixing tax breaks, choosing a baseline, corporate vs. individual tax reform, the number of people and businesses effected, Congressional politics, and the President’s waning political capital.
Then there is this: Who will drive the tax train? White House spokesman Sean Spicer says it will be the President: “Obviously, we’re driving the train on this,” Spicer said at his daily press briefing. “We’re going to work with Congress on this. But…the president has made it very clear this is a huge priority for him, something he feels passionately about.” House Ways & Means Chair Kevin Brady seems to be on a different track. He says that a White House tax reform bill, separate from what his Capitol Hill colleagues are already working on, wouldn’t make much sense.
Speaking of presidential political capital. The White House has warned the conservative wing of the GOP that it might bypass them—and include Democrats—on tax reform if they don’t back President Trump’s agenda. Democrats might get on board with tax reform, but a tax cut that looks like Trump’s campaign version and largely benefits the rich won’t have many Democratic passengers.
Today on the Hill. The House Ways & Means Committee will mark up a bill a bill from Rep. Bill Pascrell (D-NJ) that would use the W&M Chair’s power to make the President’s tax returns public. Once the mark up is complete, Chairman Brady will have final say over whether the bill sees the House floor. Don’t count on it.
Philadelphia will evaluate its tax incentives. The City Council unanimously approved a bill last week to require regular evaluation of the economic impact of tax incentive and exemption programs. The effort comes on the heels of a 2016 Pew Charitable Trusts report that found 21 city tax incentives and exemptions resulted in at least $215 million in foregone tax revenue. Pew notes that Philadelphia "does not conduct comprehensive analyses of how much all the tax expenditures cost or whether they achieve their purposes." While there have been jobs created and buildings constructed, "the issue is whether those benefits outweigh the costs."
Ohio Governor John Kasich wants Ohio to process and distribute local business profits taxes. He says it will save taxpayers $800 million in compliance costs. Under the bill, the Ohio Department of Taxation would process the payments and return the proceeds to municipalities, with interest. But the state would also charge a 1 percent administration fee. Cleveland City Council President Kevin Kelley says that would cost Cleveland $750,000, and that “We don't need another layer of state bureaucracy to handle our local tax collections; to skim off 1 percent of our tax revenue."
Saudi Arabia chooses a tax incentive for oil giant Saudi Aramco. The kingdom has cut the income tax for the state-owned oil and gas giant Aramco from 85 percent to 50 percent in advance of the company’s initial public offering next year. The tax cut will make the sale more attractive, since it could reduce the company’s tax bill by tens of billions of dollars. The IPO will be the world’s largest equity sale.
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