House Ways and Means Committee Chairman Kevin Brady, R-Tex., on November 3 released a “Chairman’s Mark” for the Tax Cuts and Jobs Act (H.R. 1). The tax reform legislation was released the previous day. The tax reform bill is House Republicans’ first attempt at comprehensive tax reform.
Chairman’s Mark for Tax Cuts and Jobs Act
The “Chairman’s Mark” changes the bill so that it conforms with the approved $1.5 trillion budget resolution. This opens the door for the reconciliation process Republicans intend to use to move the legislation through the Senate. “Today I have released the text of the Tax Cuts and Jobs Act that will be considered by the Ways and Means Committee on Monday. This substitute amendment contains technical changes and additional modifications to the introduced bill,” Brady said in a press release. “It also changes the bill to conform with the budget instruction and removes a provision that could have jeopardized privilege of the bill in the Senate.”
Brady also noted in his press release that he will offer an additional amendment to the bill to make more substantive changes. The markup of the House GOP tax bill is scheduled to begin on November 6. While speaking at an event on November 3, Brady predicted the markup of the bill will conclude by November 8. The Senate Finance Committee is expected to release its tax reform proposal the same day.
According to a November 3 estimate released by the Joint Committee on Taxation (JCT), the changes made to the bill involve the method for calculating inflation adjustments. According to the JCT, using the chained consumer price index (C-CPI) before the original 2023 start date will raise $128.2 billion, instead of earlier estimates of $39.2 billion.
The success of the House GOP tax reform bill remains uncertain, as leadership struggles to meet intraparty demands and expectations. Several Republicans from highly populated states have expressed dissatisfaction with the bill’s elimination of the State and Local Tax (SALT) deduction. The common consensus on Capitol Hill is that the legislative text and scope of the House bill is almost certain to change.
John Gimigliano, principal-in-charge of federal tax legislative services, KPMG LLP, called the House GOP tax bill an “opening bid on tax reform, not the final one.” According to Gimigliano, a final bill agreed upon by both the House and Senate may resemble neither the House nor Senate’s tax reform measures.
“Recent history suggests that the first version of legislation is always the most ambitious version. And that ambition is diminished as the bill makes its way through each stage of the legislative process. So the next question is how much of today’s proposal can stick,” Gimigliano said in a November 2 statement sent to Wolters Kluwer. “The Chairman’s mark will likely get modified in Committee markup and the Senate will produce its own bill subject to more changes. A House and Senate product must get reconciled in conference. It’s possible that any final conference report won’t bear a strong resemblance to either the House or Senate bill,” he added.