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House Ways and Means Committee Chairman Kevin Brady (R-Texas) said that tax cut legislation he hopes to unveil in August will include a package of bills, the centerpiece of which will be a proposal to make some individual and business tax cuts permanent.
“I don’t see it as one bill. I see it as a package of two, three, or four approaches—with permanency being one of them,” he said at a June 26 Washington Post event. Retirement savings is one area that will be addressed in the package, he said.
Brady said drafts of the legislative proposals will be circulated in the House in July and a legislative outline of the bills will be released in early August, followed by a House vote in the fall.
House Republicans are banking on a tax cut bill as a talking point for the November midterm elections. Passing a bill remains a top priority for House leadership. Senate Republicans have showed no sign that they want to pass such legislation before the elections.
A source familiar with the conversation told Bloomberg Tax that House leadership would likely pursue “home run” issues on which every Republican can vote yes.
Tax provisions that could be part of the package include extending the child tax credit and increasing the charitable contribution deduction limitations.
Dave Camp, who was Ways and Means chairman from 2011 to 2015, said lawmakers may look to a proposal drafted by Reps. Diane Black (R-Tenn.) and Danny K. Davis (D-Ill.), leaders of the Education and Family Benefits Tax Reform Working Group, for inspiration on provisions related to education savings.
In October 2013, Davis and Black introduced the Student and Family Tax Simplification Act (H.R. 3393), which consolidates four higher education tax benefits—the American Opportunity Tax Credit, the Hope Scholarship Credit, the Lifetime Learning Credit, and the tuition deduction.
Brady has said education is on the list of issues he would like to address in the “phase two” package.
The work done by Black and Davis “would probably be a good starting point,” Camp, a senior policy adviser at PricewaterhouseCoopers LLP’s Washington National Tax Services practice, told Bloomberg Tax. Camp said he isn’t sure if that’s the approach the committee is taking.
Tax extenders, which are temporary tax provisions, wouldn’t be addressed in the package because there is a lot of work still to be done on them, Brady told reporters after the event. Those tax breaks may be addressed later in the year, he said.
The Ways and Means Committee has been discussing the temporary tax breaks—and how to handle them in the aftermath of tax reform—since the beginning of the year.
Camp said adding tax extenders to the mix would complicate the tax cut 2.0 process. “There really isn’t consensus” between the House and Senate on extenders, he said, and those have historically been dealt with “at the end of the end of the lame duck” session after the midterm elections.
Rep. Darin LaHood (R-Ill.) told Bloomberg Tax that there are some non-technical changes to the 2017 tax act (Pub. L. No. 115-97) that need to be fixed. “Determining if those can be done by Treasury, administratively, or whether we need to do that, I think is something we’re looking at,” he said.
When considering such changes, lawmakers are also considering timing. “Some we may be able to wait until the end of the year on, so I think that’s the general discussion at this point,” he said.
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