House Republicans pushed the unveiling of much-anticipated tax reform legislation from November 1 to November 2. After a late evening meeting on October 31, House Ways and Means Republicans decided to hold the bill because various policy issues remained unsettled. Therefore, the house bill was delayed and is now scheduled to be released at 9:00 a.m. on November 2.
House Bill Delayed
“In consultation with President Trump and our leadership team, we have decided to release the bill text on Thursday. We are pleased with the progress we are making. We remain on schedule to take action and approve a bill at our committee beginning next week, ” Ways and Means Chairman Kevin Brady, R-Tex., said in a late October 31 statement.
The policy decisions on which Republican House taxwriters are trying to reach consensus are (1) how to handle the state and local tax (SALT) deduction and (2) the tax treatment for Code Sec. 401(k) retirement plans. According to several reports, the key unresolved decisions center around the need for revenue raisers to offset the proposed tax cuts.
Ways and Means ranking member Richard E. Neal, D-Mass., sent a November 1 letter to Brady regarding the announcement that the tax reform bill’s released would be delayed. He urged Brady to delay the committee markup of the legislation that is scheduled for November 6, saying the “hastily-drafted bill” is being subjected to “unrealistic and artificial deadlines.”
Meanwhile, the Senate Finance Committee (SFC) continues to finalize its own tax reform legislation following the unified tax reform framework released by the Senate, House and Trump administration. The Senate’s bill is expected to be released on November 8.
SFC Chairman Orrin G. Hatch, R-Utah, has consistently said his committee’s bill is likely to look different from legislation released in the House. Reportedly, a key difference will be the Senate’s choice not to repeal the estate tax.
Senate Minority Leader Charles E. Schumer, D-N.Y., criticized House Republicans on November 1 in a series of tweets. Schumer commented on leaked House bill language that proposes (1) lowering the current 401(k) tax-free contribution amount, and (2) eliminating the SALT deduction. “If true, the GOP will hike taxes on middle-class Americans’ retirement savings so they can line the pockets of the wealthy and biggest corporations, ” Schumer said.
Currently, 401(k) contributions can reach up to $18,000 for the 2017 tax year and, for taxpayers who are over 50 years old, $24,000. For 2018, those amounts, adjusted for inflation, will be $18,500 and $24,500, respectively, under current law.
According to Brady, the bill text to be released will likely not convey the full picture of tax reform policy proposals and agreements among House Republicans. Brady told reporters that he will likely offer some provisions by way of amendment.
President Trump tweeted on November 1 to promote the idea of repealing the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate to help pay for tax cuts. The Congressional Budget Office (CBO) has estimated that repealing the provision would save the federal government more than $400 billion over a 10-year period.
“Wouldn’t it be great to repeal the very unfair and unpopular individual mandate in Obamacare and use those savings for further tax cuts for the middle-class…the House and Senate should consider ASAP as the process of final approval moves along. Push biggest tax cuts ever,” Trump said in a series of tweets.
However, Brady has expressed concern that involving the repeal of the ACA’s individual mandate could hinder tax reform’s chance of success in the Senate. “What I don’t want to do is to add things that could again kill tax reform like health care died over there,” Brady said during an October 31 interview. “Look, I want to see that individual mandate repealed…I just haven’t seen, no one has seen, 50 votes in the Senate to do it.”
By Jessica Jeane, Wolters Kluwer News Staff
Letter from Ways and Means Ranking Member Neal to Chairman Brady