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TAX TAKE: Ch-Ch-Ch-Ch-Changes: Upcoming Retirements and the Mid-Term Elections Will Reshape the Tax-Writing Committees

Tax Alert

As the Congressional Democratic leadership and White House continue to assess a potential path forward for the Build Back Better package (particularly how to scale back the legislation and find agreement with Senator Joe Manchin (D-WV)), this week we shift our focus to give you an overview of how the make-up of both the House Committee on Ways and Means and the Senate Committee on Finance will change significantly due to upcoming retirements and the mid-term elections.

House Committee on Ways and Means

On the House Committee on Ways and Means, six members have announced they are not seeking re-election: Representatives Kevin Brady (R-TX), Devin Nunes (R-CA), Tom Reed (R-NY), Ron Kind (D-WI), Stephanie Murphy (D-FL), and Tom Suozzi (D-NY). 

A few items of note:

  • Rep. Nunes resigned effective January 1, 2022 and it is anticipated that his successor will be named shortly.
  • The retirement of Rep. Brady has kicked-off a race for his successor as the leading Republican on the committee among senior members such as Reps. Vern Buchanan (R-FL), Adrian Smith (R-NE), and others.
  • If Republicans regain the majority in the House, as is being predicted, they would not only have to fill their retiring seats, they would also have to fill a considerable number of new seats on the committee that they would gain due to new committee ratios.
  • Rep. Brady's successor would become the next Chairman of the committee if Republicans take control.

All of this means that the direction and priorities for the committee could likely change significantly in 2023.

On the Democratic side, the retirements of Reps. Kind, Murphy, and Suozzi will mean the loss of three leading moderates on the committee. Once the makeup of the committee is determined in the next Congress, it will be important to monitor who will be the Democrats most likely to work across the aisle on legislation given the potential for divided government after the mid-term elections.

Senate Committee on Finance

On the Senate Committee on Finance, Senators Richard Burr (R-NC), Rob Portman (R-OH), and Pat Toomey (R-PA) have announced their retirements. A significant number of Senate Finance Committee members are running for re-election as well: Senators Mike Crapo (R-ID), Chuck Grassley (R-IA), James Lankford (R-OK), Tim Scott (R-SC), John Thune (R-SD), Todd Young (R-IN), Michael Bennet (D-CO), Catherine Cortez Masto (D-NV), Maggie Hassan (D-NH), and, Ron Wyden (D-OR). Interestingly, both committee leaders (Chairman Wyden and Ranking Member Crapo) are among those members running for re-election.

The three retirements, combined with 10 members in an election cycle, could certainly alter the composition and priorities of the committee in the next Congress. 
Ch-ch-ch-ch-changes are coming to the Congressional tax-writing committees. Taxpayers and stakeholders will be well served to keep a close eye on these developments and how they could impact industry tax policy priorities. #TaxTake

In the News

Jorge commented in InvestmentNews on the possibility of retroactive tax changes if Build Back Better legislation regains momentum. "The longer Build Back Better lingers, the harder it becomes for Democrats to pass something retroactively," Castro noted. 

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