Here is your daily round-up of news and analysis as tax reform moves through Congress.
In the news
Chicago Tribune. Heather Wilhelm: “'Evil’ tax cuts? Nope, it’s blue-state panic”
Ah, the holiday season. It’s a magical time, bursting with joy, laughter, parties, twinkling lights and mildly terrifying mall-dwelling Santas. It’s also bursting, unfortunately, with the sounds of caterwauling blue-state politicians shrieking that the GOP tax reform bill signals the end of civilization as we know it.
Can you hear it? Fire and brimstone! The weeping and gnashing of teeth!
According to Senate Minority Leader Nancy Pelosi, this reshuffling of government regulations amounts to “Armageddon” and “the worst bill in the history of the United States Congress.” California Gov. Jerry Brown labeled the tax bill “evil in the extreme.” According to Vermont Sen. Bernie Sanders, the proposal amounts to “class warfare” and “one of the greatest robberies in American history.”
CQ: “Six Things To Watch as Tax Overhaul Endgame Nears”
A number of sticking points emerged last week as Republican lawmakers began jockeying for their favorite parts of the House and Senate tax plans.
Top tax writers from each chamber will formally meet Wednesday at 2 p.m. to discuss their differences, but the real negotiations have already begun behind the scenes.
House Majority Leader Kevin McCarthy, R-Calif., said last week that a finished tax bill likely wouldn’t be ready this week, so final votes could come just before lawmakers leave for the holidays. Congress is scheduled to remain in town until at least Dec. 22, when a stopgap government spending measure (H J Res 123) expires.
Republicans have until then to work out significant policy differences in the two plans if they still intend to send a final version to President Donald Trump before Christmas. Some of those differences appear to be already settled. House Republicans, for example, sound happy to accept Senate provisions rolling back the 2010 health care law’s so-called individual mandate (PL 111-148, PL 111-152) and opening up drilling in the Arctic National Wildlife Refuge.
Others could prove trickier to resolve.
The Hill: “Trump to give tax speech Wednesday”
President Trump will sell the GOP's tax-cut plans to the public in a speech on Wednesday amid efforts from congressional Republicans to get legislation on his desk by Christmas.
“As we work with Congress to achieve historic tax cuts, the President plans to speak Wednesday to the American people on how tax reform will lead to a brighter future for them and their families,” White House deputy press secretary Lindsay Walters said in a statement Monday.
From the U.S. Chamber
Caroline Harris: "Why We Don’t Need a Worldwide Interest Limitation (And Other Tips to Make America’s Interest Limitation Great Again)"
As we continue work towards pro-growth tax reform, the U.S. Chamber continues to give input that would make the final product as pro-growth as possible. Last week, we chimed in here and here on concerns on the alternative minimum tax (AMT). And we’ve been communicating ideas to Capitol Hill and the administration on myriad other issues like interest deductibility, transition rules, international competitiveness issues, passthrough concerns, and other more industry specific concerns (that nonetheless present ramifications for the economy as a whole).
While all issues merit attention, today, I’m taking a deeper dive on one issue in particular: interest deductibility limitation. There are two limitations in play here: (1) §163(j), which imposes a general limitation on net interest deductibility; and (2) §163(n), which provides a limitation based on the group’s worldwide debt ratio. Taxpayers would be disallowed interest deductions pursuant to whichever provision (§163(j) or §163(n)) denies a larger amount of interest expense. If this seems confusing or burdensome, that’s because it is.
J.D. Foster: “Treasury Confirms Tax Reform Revenue Neutral”
Budget impacts of pro-growth tax reform remain a significant issue, and reasonably so given the large projected deficits the Obama administration left behind. On Monday, the Treasury Department’s Office of Tax Policy released its analysis confirming what we and others have argued – that in the real world, the tax reform about to be finalized in Congress may not improve the budget picture, but it does not make matters worse. It will, however, significantly raise economic growth for years to come.
Tell Congress: The time for tax reform is now.
