Congressional lawmakers on Capitol Hill continue to focus on tax reform. Republicans and Democrats alike have been discussing the effects of tax reform, albeit reaching different conclusions.
Hearings Focus on Tax Reform
The Ways and Means Committee held a hearing earlier this week, marking the first in a series of upcoming committee hearings on tax reform. The Ways and Means hearings are each expected to examine the effects of the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97).
Small Businesses. Ways and Means Tax Policy Subcommittee Chairman Vern Buchanan, R-Fla., has announced the second tax reform hearing in the series is scheduled for May 23. The subcommittee hearing is expected to focus on the TCJA’s impact on small businesses.
Senate. The Senate Finance Committee (SFC) examined early impressions of the TCJA in a hearing last month. SFC Chairman Hatch, R-Utah told Wolters Kluwer last week that he is also currently examining House proposals to reform the IRS.
Meanwhile, Ways and Means Democrats remain united in their opposition against the new tax law. Ranking member Richard Neal, D-Mass., released a Democratic Progress Report earlier this week, which details areas in which Democrats believe the TCJA has fallen short.
The Republican tax law has not put the middle class first or provided relief for small businesses, the progress report notes. Rather, it has provided large “tax cuts to big corporations and wealthy executives,” the report added.
Additionally, Democrats have criticized the TCJA for significantly adding to the federal deficit. Neal called the new law “fiscally irresponsible,” during the Way and Means hearing earlier this week.
However, House Speaker Paul Ryan, R-Wis., called Democratic tax policy ideas and criticisms of the TCJA “bizarre,” during a May 17 press briefing. Democrats are in “denial” about the “thriving economy,” according to Ryan.
“If you saw yesterday’s Ways and Means hearing, Democrats are still using the same old doom-and-gloom talk that they were using six months ago,” Ryan said. “It was bizarre before, and it is even more bizarre now, when Democrats are openly calling for tax increases, which will do nothing but harm our economy,” he added.
To that end, several House Democrats have called for raising the corporate tax rate, including certain Ways and Means members during the full committee hearing earlier this week. Under the TCJA, the corporate tax rate was lowered from 35 to 21 percent.
Likewise, Senate Democrats across the Capitol have proposed raising the corporate tax rate to 25 percent. Additionally, in a proposal released by Senate Democrats in March, the top individual tax rate would be reinstated to 39.6 percent. Under the TCJA, the top individual tax rate was lowered to 37 percent. These tax rate increases would pay for a $1 trillion infrastructure plan, according to the Democratic proposal.
Ways and Means Open Seat
In related news, Rep. Brad Wenstrup, R-Ohio, may be eyeing a seat in the House’s tax writing committee. The House Steering Committee has recommended Wenstrup to serve as a member of the Ways and Means Committee. Wenstrup is a doctor, war veteran, and small business owner. He would replace Rep. Patrick Meehan, R-Pa., who resigned last month.
By Jessica Jeane, Wolters Kluwer News Staff