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Nov. 29 — The momentum for a revamp of the tax code may be building around the House GOP tax overhaul blueprint and President-elect Donald Trump, but the Senate could end up being the key to a final deal.
What the Senate can pass would decide what ends up in a tax bill. “At the end of the day, it is the Senate that will be calling the tune, especially if they do this using 60 votes,” said Dean Zerbe, a former Finance Committee tax counsel and national managing director of Alliantgroup LP. Using 60 votes would mean that a bill passes the Senate with bipartisan support. A fast-track budget measure called reconciliation requires 51 votes in the Senate but could limit the size and shape of a tax bill.
Finance Committee Chairman Orrin G. Hatch (R-Utah) was more careful when asked how the Senate can shape a 2017 tax overhaul. “We’re going to work together and we’ll see what can be done,” Hatch told reporters Nov. 29.
But he did appear to question whether an overhaul was possible in the first 100 days of the Trump administration as some have suggested. “I don’t know that it’s ever been speedy. Let me put it that way,” Hatch told reporters. “Good for Kevin. Good for the House,” Hatch said referring to House Ways and Means Chairman Kevin Brady (R-Texas) when asked about the 100-day timeline.
Senate taxwriters haven’t been vocal about the idea of an overhaul since Trump’s election, but silence doesn’t mean they don’t want to play a major part in a tax code rewrite. Hatch is starting to meet with Republicans on his committee to let them flesh out their own tax priorities.
“I would say the House has kind of got momentum on this early,” said Sen. John Thune (R-S.D.). “But we’ll have a big role to play.”
Hatch and others on the panel have worked on tax revamp policy proposals for years, which they don’t want others to forget. “There’s been a lot of groundwork laid,” said Thune, who expected to meet with Hatch this week.
Hatch also offered a broad hint that he is now looking at the bigger picture, beyond the idea of a corporate integration draft, which would remove the double layer of corporate taxation. “That’s just a small part of my overall tax plan and I suspect that any real tax bill that passes will have corporate integration in it,” he said.
But there are doubts if other Finance Committee Republicans support the idea of corporate integration.
“It’s unclear if Hatch has Republican Finance Committee members who support corporate integration,” a tax lobbyist told Bloomberg BNA. “During the hearing, no one came forward to say this is a great idea.”
The House has an advantage because their tax overhaul blueprint can serve as a framework for overhaul discussions. “I’d expect the Senate to become involved rather quickly, as we both know we need each other to get it done,” a Republican aide said.
A former Democratic tax staffer said that the Senate hasn’t come together on an idea like House Republicans have on the blueprint. “I think you are going to see Senate Democrats and Senate Republicans take a long hard look at how you would actually implement something like the House blueprint, for example something like the consumption tax,” she said.
Several Republican-leaning lobbyists and strategists expect the Senate to exert influence down the line.
The Senate has traditionally been more measured, deliberative and bipartisan. That could mean that it might try to get Democrats on board after a bill is passed by the House, some lobbyists said.
That could result in a bit more balance in the package—some Senate Republicans would prefer to avoid the polarizing fast-track process called reconciliation—since House Republicans aren’t expected to pass a bipartisan bill.
“The Senate is a great check on both houses,” one lobbyist said, “the lower one and the white one.”
Sen. Benjamin L. Cardin (D-Md.), a Finance Committee member, is holding out hope for a bipartisan tax bill. “When you get strong bipartisan support, it not only gives you good policy, it gives you sustainable policy,” Cardin told Bloomberg BNA. “And in the tax arena, the number one complaint is the lack of predictability.”
With assistance from Laura Davison in Washington.
To contact the editor responsible for this story: Meg Shreve at email@example.com
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