For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
Nov. 9 — House Ways and Means Committee Republicans are optimistic that 2017 might finally be the year to pass legislation overhauling the tax system. Or, at least, the international side of the tax code.
With majorities in the House and Senate, tax-focused leadership in both chambers and a tax proposal the committee pushed out last year, Republicans are hopeful—if not fully confident—that the time has come to eliminate some of the complexity in the tax laws in favor of lowering rates for corporations and individuals. The last big tax revamp was 30 years ago in 1986.
“We have more and better ideas than we’ve had in a generation,” Ways and Means Committee Chairman Kevin Brady (R-Texas) said at an Oct. 28 event. “This is more than achievable.”
This won’t be the first time lawmakers will start a fresh year with high hopes for big tax changes. In 2015 and 2016, House Speaker Paul D. Ryan (R-Wis.)—formerly Ways and Means chairman—and Sen. Charles E. Schumer (D-N.Y.) who is expected to become Senate minority leader, started and stopped discussions about an international tax deal that would partner a lower repatriation tax rate for overseas corporate earnings with spending on infrastructure.
The desire for business tax overhaul is high on the agenda for both House Republicans and the incoming Trump administration, said Linda Carlisle, a member at Miller & Chevalier Chartered. As the likelihood for a repatriation deal increases, the discussion will turn to whether the money will be used for infrastructure or lower tax rates, she said.
“The fact that Brady hired Barbara Angus to be chief tax counsel is monumental. She is brilliant, steeped in international tax and has the ability to effectuate international tax reform. It shows Brady has a real desire to do that,” Carlisle told Bloomberg BNA.
Brady hired Angus in early 2016 after he took over the Ways and Means chairmanship. She was one of the lead writers of the tax blueprint that House Republicans released in June, mapping out a plan to reduce tax rates for businesses and individual taxpayers and eliminate a number of deductions, benefits and other tax breaks. The outline is now being drafted as legislation, slated to be released this winter.
Though the blueprint was seen as a departure from previous tax proposals, some lobbyists are concerned that the border adjustability provision—to tax imports and exempt exports—that funds much of the lower tax rates in the plan isn’t likely to comply with World Trade Organization rules, which allow border adjustment provisions for value-added tax systems, but not for income tax regimes.
President-elect Donald Trump’s tax plan, which has been subject to some uncertainty, has moved to more closely mirror the House Republicans’ plan over the course of the campaign.
“We are committed to tax reform regardless of the administration,” a House Republican aide said.
With Trump in the White House, Republicans plan to waste little time repealing many of the central provisions of the Affordable Care Act, Diane Black (R-Tenn.), told Bloomberg BNA. In particular, lawmakers want to lift requirements for insurers to provide basic coverage for certain services and discontinue the individual insurance exchanges, she said. “This one-size-fits-all approach has been the main reason why premiums have been going up,” Black said.Republicans plan to keep parts of the law intact, such as allowing people younger than 26 to stay on their parents’ health insurance plans and the ban on coverage denials due to pre-existing conditions, she said.Pat Tiberi (R-Ohio) is expected to remain chairman of the health subcommittee. Lloyd Doggett (D-Texas), who founded and co-chaired the House Prescription Drug Taskforce, is expected to take over as ranking member on the health subcommittee, according to congressional staffers who asked not to be named. After passing the Medicare Access and CHIP Reauthorization Act (MACRA), which changed how doctors are paid by Medicare, lawmakers are eager to focus their attention on how Medicare pays hospitals and post-acute care facilities, a spokesperson for Tiberi told Bloomberg BNA. The emphasis for Republicans will be on improving care for Medicare beneficiaries and bolstering the Medicare Advantage program.
Republicans could be looking to fill at least one and as many as three seats on the committee to replace Charles Boustany Jr. (R-La.) and Todd Young (R-Ind.). Young, who left the House to run for the Senate, won his race, while Boustany lost. Robert Dold (R-Ill.) also lost his bid for re-election. Peter Roskam (R-Ill.) is expected to be named chairman of the tax policy subcommittee, a position previously held by Boustany. Roskam currently chairs the Oversight Subcommittee.
Jackie Walorski (R-Ind.) and Mike Bishop (R-Mich.) are hoping to fill the vacancies, according to aides from their respective offices. Bishop would be the first Republican from Michigan to serve on the committee since former committee Chairman Dave Camp left Congress in 2014 after releasing his tax overhaul plan.
Carlos Curbelo (R-Fla.), Bradley Byrne (R-Ala.) and Andy Barr (R-Ky.) are also interested in the Ways and Means spots, according to lobbyists and House staffers, who requested to speak on background about sensitive personnel matters.
Republicans held 24 slots and Democrats had 15 seats on the committee in the 114th Congress. Democrats will be looking to fill the seats held by retiring members Charles B. Rangel (D-N.Y.) and Jim McDermott (D-Wash).
First in the queue is Brian Higgins (D-N.Y.), who will reclaim his seat on the committee in January after his spot was eliminated when Republicans took back the House in 2010. His priorities will include the New Markets Tax Credit program, the solar investment tax credit and tax simplification for middle-class families, according to a spokeswoman from his office.
Suzan DelBene (D-Wash.), a former director of the Washington State Department of Revenue, and Terri A. Sewell (D-Ala.) are also vying for the openings, according to Republican and Democratic House staffers. Ranking member Sander M. Levin (Mich). is expected to stay on as the committee’s top Democrat..
“Both in the House and Senate there are Democrat and Republican colleagues who know the rates are too high and there are profits overseas that need to be flown back,” Brady said. House Republicans “will bring out the most pro-growth, competitive plan we can. The Senate, by design, will moderate it and the president will weigh in.”
To contact the editor responsible for this story: Meg Shreve at firstname.lastname@example.org
Copyright © 2016 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 email@example.com.
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 firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)