For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
The Senate Finance Committee began to wade through its tax reform plan Nov. 13, setting off a marathon markup process that will likely consume the remaining legislative days before Thanksgiving recess.
Senators have already submitted several hundred amendments, including two from Finance Committee Chairman Orrin G. Hatch (R-Utah) to make the plan compliant with chamber rules and to remove the two layers of corporate tax. Hatch hinted in his opening remarks that changes to the corporate provisions are afoot, and said he hopes to make them permanent despite concerns about how they would impact the deficit beyond the 10-year budget window allowed by Senate rules.
Hatch said he plans to release an updated chairman’s mark on Nov. 14. When asked about the document, he said “we will have to see. This is a wide open mark.”
Democrats at the markup slammed Republicans for supporting a plan that would add to the deficit and would disproportionately help corporations and the wealthy.
The markup comes the same week the House is set to vote on its bill ( H.R. 1)—possibly as early as Nov. 16. House Ways and Means Committee Chairman Kevin Brady (R-Texas) told reporters Nov. 13 he doesn’t anticipate any big changes to the legislation this week.
Brady also said he has told senators that keeping the $10,000 cap for property tax deductions is a top priority. The Senate plan would fully repeal state and local tax deductions. (For a road map of where to find key provisions and compare the House tax reform bill (H.R. 1) with the Senate Finance Committee version, read Bloomberg Tax’s analysis.)
The Congressional Budget Office said, however, that Congress’ main scorekeeper for tax legislation won’t be able to gauge the economic effects of the House tax-overhaul bill quickly, which means the House may vote on H.R. 1 before knowing those effects.
The Joint Committee on Taxation indicated to the CBO that it’s not practical to do a full “macroeconomic analysis” in “the very short time available between completion of the bill and the filing of the committee report.”
During the markup, Sen. Pat Roberts (R-Kan.) said that while the plan isn’t “perfect,” it is “good” and can be improved.
Sen. Ron Johnson (R-Wis.) told Bloomberg Tax that he doesn’t like the tax treatment of passthrough businesses in the Senate tax plan. The Senate version suggests a 17.4 percent deduction for the non-wage portion of passthrough business income.
“Let’s honor what the people who developed the framework acknowledged when they said a 20 percent rate for corporates, and a 25 percent rate for passthroughs,” he said.
Johnson said he wasn’t drawing any “red lines” right now. “But I’m doing everything I can to make sure the framework is followed,” he said.
Submitting an amendment doesn’t guarantee the senator will end up offering it. Republicans are likely going to try to control the markup process, allowing certain proposals to be brought forward. Democrats may also decide not to push certain amendments that are more about messaging than a certain policy.
Hatch submitted an amendment offering a 12.5 percent deduction on the dividends that corporations pay for five years. Hatch’s office has been exploring the idea, known as corporate integration, since 2016. Previous iterations discussed a 40 percent and a 25 percent deduction on dividends paid.
An amendment from John Thune (R-S.D.), the third-ranking Republican in the Senate, would include his CHARITY Act (S. 1343) in the tax plan, Thune’s bill is widely seen as a marker for where Republicans stand on nonprofit issues.
Sen. Ron Wyden (D-Ore.), the Finance Committee’s ranking member, filed three amendments requiring the state and local tax deduction to be fully reinstated in certain situations, such as if states cut school funding or eliminate first-responder jobs.
Sen. Claire McCaskill (D-Mo.) filed three amendments requiring parity between corporate deductions and individual deductions.
With assistance from Erik Wasson (Bloomberg).
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)