They’ll be home for Christmas, unless… Speaker Paul Ryan says he may keep the House in session during the holidays to pass tax legislation: “I don’t care, we got to get this done.” He promises the House will send a bill to the Senate in November. But he warns that, “an army of lobbyists will come to protect special interest provisions… we must be able to count on the foot soldiers of the conservative movement to see this through.” Some of those foot soldiers just sent a letter urging GOP leadership to vacate their positions since they didn’t deliver a tax bill or meet other conservative legislative priorities in 2017.
And Ryan’s own troops may be AWOL. Republicans from high-tax states are pushing hard to retain some form of the state and local tax (SALT) deduction—a problem since GOP leaders and the White House were counting on repeal to help finance other tax cuts. The Wall Street Journal (paywall) reports that lawmakers are moving toward a compromise but that details remain “elusive.”
And who is middle-class anyway? The Journal’s account of the battle over SALT also shows the challenges the GOP faces as it tries to tailor a tax bill for the middle class. Representative Pete King of New York has his definition: “He suggested $400,000 in annual household income is the right dividing line in his high-cost Long Island, N.Y., community,” The Journal reports.
Will mavericks stand in the way? Sen. John McCain sunk efforts to repeal and replace the Affordable Care Act, and could do the same thing to the Big Six Unified Framework. His top concerns for tax legislation have been “public debate, some help for the middle class, and not exploding the deficit,” notes The Washington Post. Rand Paul, another mavericky GOP senator who balked at leadership bills to replace the ACA, may also oppose the budget resolution needed to move a partisan GOP tax bill. Paul wants a fiscal plan that would balance the budget in 10 years.
Trump moves to undermine ACA. In a series of steps yesterday, the president moved to undo key elements of the Affordable Care Act. The biggest change: Trump is halting $7 billion in cost sharing subsidies, a step that could immediately result in big premium hikes or even drive insurers from the exchanges. Earlier yesterday, the president signed an executive order to weaken Affordable Care Act. He calls on agencies to eliminate ACA insurance rules and expands access to “association health plans” that redefines short-term coverage—three months under the ACA—to a full year. Trump's order would also increase employers’ ability to use pretax dollars in “health reimbursement arrangements.” Workers would be able to use the money to pay for any medical expenses, not just for ACA-compliant health policies. While low-cost association health plan could gear up relatively quickly, the other changes could take years to implement and would certainly end up in court.
Why do we make it so hard for immigrants to pay their taxes? TPC’s Howard Gleckman unpacks the issue explored a recent TPC program. “Immigrants face special difficulties the rest of us do not. One revolves around incredibly complex rules for certain credits and exemptions. The other is the process of filing itself… Immigrants pay taxes, often enthusiastically, even though they may never receive the benefits of citizenship. The least we can do is make it easier for them to do so.”
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, email us.
