“Pressure, pushing down on me.” The House Freedom Caucus raised concerns over the budget bill yesterday. Speaker Ryan said, “We’re having the kind of family discussion that we need to have about how to proceed forward with a majority.” The House Rules Committee delayed its consideration of a stop-gap funding measure until today. Ryan wants a stop-gap measure to fund the government until December 22. Conservatives are grumbling but, so far, don’t seem willing to sink the bill and shut down the government.
“Pressing down on you…” President Trump, meanwhile, wants a tax bill on his desk before December 22, too. White House Legislative Director Marc Short says the administration may try to win over Senator Bob Corker, who voted against the Senate version of the Tax Cuts and Jobs Act because of deficit concerns. Is this why President Trump now seems OK with the idea of bumping up the bill’s proposed 20 percent corporate income tax rate to 22 percent? The big question for the House and Senate negotiators: What would they do with the extra $200 billion?
“Splits a family in two.” Senate Finance Committee Chair Orrin Hatch, Senator Rob Portman, and House Ways & Means Chair Kevin Brady all stressed yesterday that eliminating the corporate alternative minimum tax is a conference priority. Repealing it would cost $40 billion over ten years. Will the TCJA have those dollars to spare? There seems little Senate interest in repealing the individual AMT.
“Pressure on people… people on streets.” Maybe the final tax bill will include a little SALT. House Republican leaders are figuring out if they can give some tax relief to those in high-tax states like California. Perhaps a limited amount of state income tax paid will be deductible from federal income taxes. This provision was in neither the House nor Senate version of the TCJA, so the House leaders may “airdrop” it into the conference bill in order to secure support from GOP members from other high-tax states.
“Knowing what this world is about…” There’s a lot to digest in the Senate TCJA, and TPC's Howard Gleckman offers seven takeaways to make it easier to track. Follow these seven issues: the price tag, individual income tax rates, itemized deductions, pass-through businesses, corporations, health care, and economic growth.
“Turned away from it all, like a blind man.” TPC’s Tracy Gordon explains why the tax bill is a missed opportunity for boosting infrastructure. Congress and the president have been unable to agree on how money should be raised, where it should go, and what to do first. Revenues are hard to come by—and some tax provisions, such as the House provision to eliminate private purpose tax-exempt bonds, would discourage private development in public infrastructure. Ways & Means Chair Kevin Brady has suggested that the House may agree to preserve private-purpose bonds. Concludes Gordon, “More creative thinking and more resources will be needed to address the country’s estimated $2 trillion infrastructure deficit.”
“Insanity laughs under pressure…” For all the legislative effort, the GOP tax plan remains quite unpopular with the public, according to new polling. Gallup shows only 29 percent of Americans approve of the bill, while 56 percent disapprove. Quinnipiac also shows 29 percent approval, with 53 percent disapproving.
“Can’t we give ourselves one more chance?” The European Union has released its first “blacklist” of tax havens. The 17 territories on the blacklist include Saint Lucia, Barbados, and South Korea. The EU also released a “watchlist” of 47 countries that promise to change their tax rules to meet EU standards. The watchlist includes Hong Kong, Jersey, Bermuda, the Cayman Islands, Switzerland, and Turkey.
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