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House Ways and Means Committee Chairman Kevin Brady (R-Texas) continues his cheerleading for a tax reform bill, but he is warning about a difficult road ahead.
“It is for lawmakers and Congress and the White House, the challenge of a lifetime,” Brady said.
“I’m well aware of the many deaths that the Reagan tax reform endured before it was finally passed into law,” he said.
Brady told reporters April 3 that he was hopeful of beginning work to unify Republicans behind tax legislation. The failure of the health care bill has given pause to Republican leaders in the House as they try to chart a road ahead for a rewrite of the tax code.
Questions continue to linger around a provision in the House plan that would tax imports at 20 percent. The House Freedom Caucus, a group of about three dozen ultra-conservative Republicans, hasn’t taken a position on the provision called border adjustability. But some of its members, such as Rep. Jim Jordan (R-Ohio), don’t support it. A significant number of Freedom Caucus members opposed the health care bill, leading to its failure.
Talking to House Democrats to get them on board is one option. Brady will meet with committee Democrats this week to discuss the tax bill.
Opponents of border adjustability haven’t “got anything to worry about” because the Senate isn’t going to entertain that idea, Sen. Charles E. Grassley (R-Iowa) said.
“If the Senate starts working on a tax bill of its own, you aren’t going to hear anything about border adjustment in the Senate Finance Committee,” he told reporters April 3.
Grassley is among a growing group of Republicans in the Senate who have been critical of the House Republican plan to put a 20 percent levy on imports and exempt exported goods from tax. Tax counsels for Republican and Democratic senators are expected to meet in the coming days to talk about ideas for overhauling the tax code, he said.
Brady doubled down on his promise that the Affordable Care Act’s taxes will stay in place as long as the law does, despite some lawmakers saying they are open to repealing the taxes in a broader tax reform effort. Trying to stack the repeal on top of an overhaul could lead to higher taxes for small businesses and middle-class families, he said.
“Will they or won’t they” remains the question of the week on the Hill as reports swirl of moderate and hard-right lawmakers meeting to try and scrape together a deal before Congress goes on its two-week April recess. Still, lawmakers should know better than to force a vote after repeal efforts fell apart in the House late last month. Lawmakers also have full plates in the weeks ahead, as they must pass a funding bill before the current resolution expires on April 28.
“One of the lessons of the healthcare discussions was to not rush things, let members have plenty of time to have these policy conversations among themselves, and so I think that should continue on that sort of organic time table rather than pushing a date that this needs to be done,” Brady said April 3. “Let the conversations continue regardless of the weeks or months that it takes for them to get comfortable with a ‘yes’ on healthcare reform.”
Still, Brady said the Ways and Means Committee continues to “monitor and assist when asked the conversations that continue to go on between members who were not able to get to ‘yes’ on the healthcare bill.”
A bill that would require the IRS to find probable cause for a crime before it seizes anyone’s money has been reintroduced in the House by Peter Roskam (R-Ill.) and Joseph Crowley (D-N.Y.).
The bill, which passed the House 415-0 last year, requires the Internal Revenue Service to find probable cause that the money in question came from an illegal source or criminal activity before it seizes assets for a series of bank deposits of less than $10,000, an activity known as structuring.
“It’s clear to everyone involved that there was rampant abuse in the forfeiture program. The IRS and DOJ abused their authority and took money from people who did nothing wrong,” Roskam said in a statement. “With today’s legislation, we’re making sure they can never do it again.”
An identical bill is being introduced in the Senate by Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio).
Sens. Jack Reed (D-R.I.) and Grassley reintroduced legislation that would prevent corporations from deducting costs associated with settling legal disputes with the government.
Federal law prohibits companies from deducting penalties for wrongdoing, but the Reed-Grassley legislation would prevent corporations from writing off portions of settlements that aren’t paid directly to the government, which is currently permissible.
The Reed-Grassley bill would amend the tax code to require settlements between corporations and the government to dictate how payments should be treated for tax purposes. The legislation would clarify which settlement payments are punitive, and therefore non-deductible.
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