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Last week saw the introduction of the Unified Tax Reform Framework from the “Big Six,” which started Senate and House committees on the path to writing a detailed bill with an announced deadline of November 13. For more particulars, see our most recent letter from the editor on the Schneider Downs tax reform website.
Republicans at this point seem to favor a bill that uses budget reconciliation and would only require a majority vote, an approach that leads to a slim margin for success. Many senators are letting their demands known to support any type of tax reform bill; a few have already weighed in:
Rand Paul (R-Ky.) – In a recent tweet, Paul didn’t sound very supportive of the tax framework stating, “This is a GOP tax plan? Possibly 30 percent of middle class gets a tax hike? I hope the final details are better than this.”
Pat Toomey (R-Pa.) – A little closer to our home state of Pennsylvania, Toomey is a staunch defender of tax cuts and argues against needing to pay for them at all. He states that the growth generated from the tax cuts is not accurately anticipated. He will likely support a bill, but could pressure the party to move away from full revenue neutrality, which may require the tax cuts to expire within 10 years.
Bob Corker (R-Tenn.) - Corker recently announced that he will not seek re-election and is opposed to a reform bill that would increase the federal budget deficit.
John McCain (R-Ariz.) - McCain is demanding that a tax reform bill move through regular order in a "bipartisan fashion." Since Republican leadership is currently planning to use budget reconciliation, it could be difficult to gain McCain's vote. McCain notably voted against the Bush tax cut bills in 2001 and 2003.
With these and other heavily debated benefits like the state and local tax deduction being interpreted to adversely impact the middle class, expect to hear more outcries to the press from Republicans and Democrats alike in both the House and Senate. Stay tuned to our tax reform page for more updates.
The general rule under Internal Revenue Code §451 is that an item of income shall be included in gross income for the taxable year or receipt unless ...
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