CCH Tax Day Report
The key issue the 114th Congress is facing during the lame-duck session, which began on November 14, is funding the federal government, either with another stop-gap spending bill or an omnibus bill, according to Joint Committee on Taxation (JCT) Chief of Staff Thomas A. Barthold. Speaking at the American Institute of Certified Public Accountants (AICPA) National Tax Conference on November 14 in Washington, D.C., Barthold also predicted that tax reform will be a significant focus of Congress in 2017.
Government authority to spend money is set to expire in early December, Barthold said, which signals an urgency for Congress to address the issue during the lame-duck session. Congress passed, and President Obama signed, a continuing resolution (CR) for government funding, including the IRS, in September that expires after December 9 (TAXDAY, 2016/09/29, C.1). Another stop-gap spending bill is the most likely outcome for keeping the government open into 2017, according to Barthold.
Originally, there was the possibility of an omnibus fiscal year (FY) 2017 budget bill during the lame-duck, but now a “short-term fix” seems to be the more likely solution, Barthold said. Because budget negotiations require trade-offs, Republican lawmakers would likely rather delay these considerations until after January 20, 2017, when President-elect Trump takes office, rather than negotiate with a Democratic President Obama, Barthold noted.
Tax reform will be a significant focus of the 115th Congress, scheduled to first convene in January 2017, Barthold predicted. The House GOP “Better Way” tax reform blueprint released in June (TAXDAY, 2016/06/24, C.1) contains many similarities to President-elect Trump’s tax proposals, both of which still need a number of details clarified, according to Barthold. “There are still a lot of decisions to be made,” he said.
Barthold also highlighted Senate Finance Committee (SFC) Chairman Orrin G. Hatch’s corporate integration proposal that is expected to be unveiled soon (TAXDAY, 2016/05/18, C.1). “Sen. Hatch has long believed that double taxation of corporate income is an inhibitor on investment and economic growth,” Barthold said. He also noted that Hatch views his corporate integration proposal “as an add-on piece, not competition.”
When asked as to when Hatch would release his much-anticipated proposal and whether the JCT’s scoring of the measure has delayed its unveiling, Barthold declined to answer, citing to the JCT’s rule of confidentiality. “We let the members think out loud,” Barthold said. “We treat everything with confidentiality.”
Barthold noted that business tax reform is a bipartisan concern. “Both sides of the aisle think business tax reform is important…they have some commonality. The biggest gulf has been on the individual income tax,” he said.
There has been discussion on Capitol Hill lately about a possible path forward for comprehensive tax reform in 2017 that would include the budget reconciliation process (TAXDAY, 2016/11/11, C.2). That is the same process under which the Patient Protection Affordable Care Act (P.L. 111-148) was passed, according to Barthold.
President Obama had a “similar framework” with Congress that Trump is expecting—a slim majority in the Senate and a majority in the House, Barthold said.
A budget reconciliation is a process that could help ensure tax legislation’s path to the White House. Under the reconciliation process, only 51 Senate votes are necessary to pass legislation, instead of the normal 60-vote requirement under the filibuster rule. Although the process could potentially be available to Republicans in 2017, it comes with limitations and cannot be used multiple times, Barthold said.
By Jessica Jeane, Wolters Kluwer News Staff