TAX TAKE: Hurry Up and Wait: House Tax Bills Race to the Floor
After a marathon tax markup last Tuesday in the Committee on Ways and Means, House GOP leaders are wasting no time moving the bills to the floor. House GOP leaders had hoped to hold a floor vote this week, but passage might get delayed until July at the earliest.
From there, the legislation will sit on ice indefinitely in the Democrat-controlled Senate, but behind the scenes, taxwriters from both parties and both chambers are all but certain to look for areas of agreement for a serious bipartisan tax package that can reach the President's desk by the end of the year.
Most important for business is the Build It in America Act (H.R. 3938), which includes provisions to reinstate the deduction for research and development (R&D) expenses, fix the section 163(j) earnings before interest, taxes, depreciation and amortization (EBITDA) calculation, extend bonus depreciation, and override the foreign tax credit regulations in certain circumstances. It would also scale back tax incentives for green energy production and investment and electric vehicles. During the markup, GOP taxwriters denied a half-dozen or so amendments from Democrats, including one from Rep. Lloyd Doggett (D-TX) that would require the calculation of global intangible low-taxed income (GILTI) on a country-by-country basis.
Although the markup was partisan, signs of comity on some issues didn't escape notice. Chairman Jason Smith (R-MO) noted the merits of finding a fair compromise to address the $10,000 cap on the deduction for state and local taxes (SALT). And even while lambasting the GOP's tax legislation, Ranking Member Richard Neal (D-MA) made it clear that many Democrats could support some of the business provisions if they're paired with provisions affording individual tax relief. "We stand ready to negotiate," Neal said. Other signs of bipartisan agreement were seen on raising the Form 1099-K reporting limit and encouraging charitable giving with an above-the-line deduction for individuals.
"Pairing tax cuts for businesses and families has been the bipartisan practice for several years in recent memory," Senate Finance Committee Chairman Ron Wyden (D-OR) said earlier this month. He expressed optimism that "there's enough common ground for the two sides to reach an agreement this year, and I'm going to work with my colleagues in the Senate on our own priorities."
Next year's presidential race will likely push aside any hope for a substantive tax bill, so Chairman Wyden's optimistic words and timeline may mean the wait won't be too long. #TaxTake
In the News
In Bloomberg Law, Marc commented on the House Republican tax agenda saying the tax package "is setting the Republican priorities," adding that "[t]here's got to be this last push for a big tax bill before next year."
Jorge was quoted in InvestmentNews on three bills introduced by House Committee on Ways and Means Chairman Jason Smith saying, "I see this very much as an opening bid by House Republicans and Chairman Smith." He added that it is "very unlikely that a bill in this form will pass the Senate."
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