After the slog to enact the One Big Beautiful Bill Act (OBBBA) (H.R. 1), the last thing on the minds of Congress is another tax bill. But loud voices are calling for more tax legislation sooner than anyone imagined. 

In the House, Speaker Mike Johnson (R-LA) has sketched out a plan for not one but two follow-on reconciliation bills before the next election. "We're going to have a second reconciliation package in the fall and a third in the spring of next year," he said just hours after the House sent the H.R. 1 to the president for signing. House Committee on Ways and Means Chairman Jason Smith (R-MO) also discussed his desire to end the year with another tax package, but has suggested a non-reconciliation bipartisan effort, noting numerous "tax provisions that I really care about that are expiring, or have expired, that are truly, truly bipartisan."

The GOP urge for more tax legislation is bicameral. "[T]here's a ton of things that we need to do," said Senate Finance Committee Chairman Mike Crapo (R-ID), who noted tax provisions that got left on the cutting room floor after negotiations with the House on H.R. 1 and the Senate Parliamentarian's review for compliance with the Byrd Rule. Like Chairman Smith, Senator Crapo says he would like to advance a tax bill this fall, but he stopped short of predicting action.

The universe of potential tax provisions for any tax bill is always large and aspirational. Some of the items topping the list of potential tax issues include:

• Tax extenders expiring at the end of the year, such as the work opportunity tax credit
• Retirement security legislation
• Enhancements to the Affordable Care Act (ACA) premium tax credit
• Technical corrections
• Reversing a provision of the OBBBA to restore the full deduction for gambling losses
• Taxation of digital assets, which the Committee on Ways and Means is examining this week
• The United States-Taiwan Expedited Double-Tax Relief Act 

Conventional wisdom and recent history would say another big tax bill signed into law before the election is near impossible. Even if the parties could agree on a package of tax relief, whether and how to pay for the bill would be a significant obstacle. That being said, a bipartisan tax bill could emerge from the House, as it did in early 2024 when Chairman Smith joined with then-Senate Committee on Finance Chairman Ron Wyden (D-OR) to advance legislation to extend the "Big Three" business tax extensions and increase the child tax credit. Although that effort easily passed the House, it came up well short of the 60 votes needed to start debate on the bill in the Senate. A bipartisan package seems like a tall order in any year, and it will be particularly challenging in the congressional atmosphere (although one never knows what priorities will drive members to the table).

That leaves reconciliation as a proven path to success for tax policy with a Senate majority shy of 60 votes. Of course, another bite at reconciliation would reopen the wounds from the just-signed H.R. 1 that took seven months to iron out. These developments need to be tracked closely in the next couple months as Congress develops its fall agenda. #TaxTake

In the News

Marc was quoted in two Fortune articles:

• On tax fairness implications on tip and overtime provisions
• On economic growth potential of the OBBBA

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