Hill Briefs: Brady Backs Import Tax; Hatch Pans IRS Spending

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By Kaustuv Basu, Aaron E. Lorenzo,Laura Davison and Colleen Murphy

House Ways and Means Committee Chairman Kevin Brady (R-Texas) has dug in his heels in favor of border adjustability, the import-export tax proposal engendering opposition from retailers, carmakers and other industrial groups.

For Brady, who began the first of two days of closed-door meetings with all Republicans on the committee on Dec. 14, no other answer exists for discouraging U.S. companies from moving operations abroad and hurting domestic production. He said he wouldn’t alter course on House Republican plans for the border adjustability provision to tax imports and exempt exports in lieu of a territorial tax system.

“This election, voters made it very clear they want the American economy strong again, they want Americans to be able to compete around the world without one hand tied behind our back, and they want to end the tax on made-in-America products,” he said at a news conference.

Brady has said he and other GOP members on the committee would make some decisions over the two-day gathering on developing legislation based on the blueprint, which they rolled out in June. The first day focused largely on tax issues, and the second was expected to focus mostly on repealing and replacing the Affordable Care Act.

When asked if the House plan would make accommodations on border adjustability when it comes to raw materials, Brady pivoted to talking about transition rules and how they would improve growth.

Aides who spoke on the condition of anonymity said the Senate isn’t keen on border adjustability, and Brady said the House and the Senate would have to find their own paces. Brady added that he was in “good consultation” with the Senate Finance Committee and its chairman, Sen. Orrin G. Hatch (R-Utah).

Ways and Means is drafting a tax bill ahead of President-elect Donald Trump taking office Jan. 20, in case he wants to push through tax changes early in his term. Republican leaders on both sides of the Capitol have said they plan to use a filibuster-proof, fast-track process called reconciliation to advance tax legislation.

Put It on IRS’s Tab

The Internal Revenue Service isn’t doing enough to reduce costs for employees who frequently travel on government business, the Senate Finance Committee said in a report.

The agency spent about $1.4 million on 27 employees who traveled for about half of the working days during fiscal year 2015, averaging about $52,800 a person, the Dec. 14 report said. Employees were spending excessively on high-end hotels, taxis to non-work-related locations and business-class trains, it said. This comes after the agency restricted its travel policies for executives in 2013.

“The number of employees who travel more than half of the year and the cost at which they do so is simply unacceptable,” the report said. “More troubling is that the IRS has the tools within its grasp to significantly reduce travel per diem rates and yet it elects not to do so.”

The IRS said in a statement it appreciates the recommendations and will provide a response in the “very near future” after closely reviewing the report.

Priebus Talks Taxes

More 2017 tax overhaul talk came from Reince Priebus, Trump’s incoming White House chief of staff and outgoing Republican National Committee chairman.

Priebus told talk radio host Hugh Hewitt Dec. 14 that “we will have tax, you know, we’ll have a small tax reform package, and then a bigger tax reform package at the end of April.”

It wasn’t entirely clear what he meant by a small “reform” package.

Priebus also seemed to support the idea of border adjustability.

When asked about a comment that Treasury Secretary-designate Steven Mnuchin made on CNBC about capping the home mortgage interest deduction, Priebus cautioned against drawing a conclusion.

“I don’t think anything’s a done deal,” he said.

Small Business Relief

President Barack Obama signed legislation Dec. 13 that includes relief for health reimbursement accounts.

The provision is within the sweeping 21st Century Cures Act (H.R. 34), which also boosts medical research funding and speeds up the approval process for experimental drug treatments. The provision lets businesses with fewer than 50 employees provide the accounts without facing a fine for every improperly covered employee—aimed at spurring small and mid-size businesses to replace group health plans with reimbursed individual coverage.

The Senate passed the bill Dec. 7, about a week after the House passed it.

To contact the reporters on this story: Kaustuv Basu at kbasu@bna.com, Aaron E. Lorenzo at aaron@bna.com, Laura Davison at ldavison@bna.com and Colleen Murphy at cmurphy@bna.com, in Washington

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

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