The House Ways and Means Committee began its markup of the Tax Cuts and Jobs Bill (HR 1) on November 6. Debate over the measure is expected to last for several days. At over 400 pages, the bill is House Republicans’ first legislative attempt at comprehensive tax reform. The markup is expected to resume at 10:00 a.m. on November 7.
House GOP Tax Reform Bill
Much of the markup’s first day consisted of arguments divided along party lines. Republicans praised the bill and Democrats condemned it. Republican taxwriters classified the bill as concentrated tax relief for middle-class taxpayers and businesses. However, Democrats criticized the measure for disproportionately benefiting the wealthy and being drafted without Democratic input.
“According to independent estimates from the nonpartisan Tax Foundation, the Tax Cuts and Jobs Act will lead to nearly 4-percent higher [gross domestic product] over the long term. It will increase wages by over 3 percent and boost after-tax incomes by more than 4 percent…and will create nearly a million fulltime American jobs throughout the nation,” Ways and Means Chairman Kevin Brady, R-Tex., said during openings statements.
During his opening statement ranking member Richard Neal, D-Mass., called the house GOP tax reform bill a “bad deal.” “The legislation, which was crafted solely by the majority party behind closed doors and which was not made public until late last week, puts the wealthy and well-connected first, while forcing millions of American families to watch as their taxes go up,” Neal added.
Much of Democrats’ criticism throughout the markup focused on claims that they had not been included in the “rushed” drafting process. Republicans countered by pointing to over 40 tax law and reform hearings held over the last several years. House Ways and Means Tax Policy Subcommittee ranking member Lloyd Doggett, D-Tex., introduced a motion to postpone debate of HR 1. His motion was voted down along party lines. “This motion simply requests that we reconvene this markup for next week. Our objective is insight, not delay,” Doggett said at the start of the markup.
Brady also offered an amendment, five hours into the markup. The amendment proposes several substantive changes to the house GOP tax reform bill. These changes relate to, among other things:
- the exclusion for employer-provided dependent care assistance of up to $5,000 and
- an additional three-year holding period on carried interest gains in an investment or real estate business.
Neal criticized the timing of the amendment’s introduction, as did former ranking member Sander Levin, D-Mich. They said the amendment’s list of changes was proof of “lobbyists at work.”
In addition, both Neal and Levin asked for the opportunity to ask questions and debate the amendment. “We will take up this amendment, and we will have plenty of time to question [Joint Committee on Taxation Chief of Staff Thomas] Barthold,” Brady said.
ACA Individual Mandate
Brady also announced that repeal or modification of healthcare taxes will not be part of the tax reform efforts. President Trump recently called for repealing the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate through tax reform. However, lawmakers are reluctant to include healthcare components that could potentially jeopardize the tax bill’s success.
Meanwhile, the Senate Finance Committee is expected to unveil its own tax reform legislation on November 8, the day the Way and Means Committee is expected to conclude its markup. The “Senate Finance Committee is continuing to move forward on its own legislation to increase opportunity and provide more take-home pay for American families. In an open process through regular order, members of the committee will continue to have input in the writing of this tax reform legislation.” Senate Majority Leader Mitch McConnell, R-Ky., said on the Senate floor on November 6. According to McConnell, both chambers continue to work with Trump “and his team” on comprehensive tax reform.
By Jessica Jeane, Wolters Kluwer News Staff