What to expect as tax writing committees begin work
House Ways and Means scheduled to start markup on Monday, Nov. 6
TAX ALERT |
On Monday, Nov. 6, the House Ways and Means Committee is scheduled to begin considering the tax reform proposal unveiled last week by Chairman Kevin Brady (R. Texas.). According to the Committee’s website, that process will continue “throughout the week as necessary.” The Chairman’s proposal, commonly called the “Chairman’s Mark,” will contain minor modifications or clarifications to the text, description and summaries announced last week.
Meanwhile, behind the scenes, lobbyists, tax experts and Congressional staff will be continuing to try to refine or improve the technicalities of the Chairman’s Mark, assuming no substantive policy changes are made.
The full Committee will then begin discussing and debating major policy issues, such as whether the proposed limitations on state and local tax deductions should be liberalized.
In all cases, whether a change is made for technical, policy or political reasons, any liberalization that “costs” revenue will need to be “paid for” by sacrificing another deduction or exclusion, or compromising on the amount or timing of the “headline” tax reductions, reductions in corporate and pass-through business rates, reductions in the tax rate on repatriated foreign earnings, middle class rate reductions, phase-out and elimination of the estate tax.
The Senate Republicans on the Senate Finance Committee are expected to introduce their own version of tax reform only after the House Ways and Means Committee has taken final action. At this time, no amendments on the House Floor are anticipated, whatever provisions the Committee finally agrees to.
Aside from potential major policy disagreements between the Senate and the House, there are indications that the House Chairman’s Mark could not pass the Senate even if every Republican Senator voted for it “as is” with no changes. That is because it appears to lose revenue outside of the ten-year budget window, and thus would need 60 votes, requiring substantial Democratic support which is unlikely, at this point, to pass the Senate.
Given the Senate’s traditions, preferences and prerogatives, the process may not be an orderly “line-by-line” consideration of the House bill. It may take an entirely different approach to building a bill that will meet the necessary procedural requirements, as well as the important political and policy objectives of what has been called “the greatest deliberative body in the world.”
Linked to this document are several of the important documents that will be carefully scrutinized by members of the House Ways and Means Committee, lobbyists and others seeking to influence the process, critics and opponents of the Trump Admininstration generally, and the Republican tax reform intiative in particular, as well as Senate Republicans trying to craft their own bill, and various Senators of both parties developing possible amendments to be offered, on the Senate Floor, to whatever comes out of the Senate Finance Committee.
The various Joint Committee on Taxation documents can be found here, and can be separately accessed via the links below:
- JCT Estimated Revenue Effects of H.R. 1
- JCT Description of H.R. 1
- Amendment in the Nature of a Substitute to H.R. 1
- JCT Estimated Revenue Effects of Amendment in the Nature of a Substitute to H.R. 1
- JCT Description of Amendment in the Nature of a Substitute to H.R. 1 (Green Sheet)
- Distribution Effects Of The Chairman's Amendment In The Nature Of A Substitute To H.R.1, The "Tax Cuts And Jobs Act"
The Joint Committee on Taxaxtion website can be found here.