Hundreds of special tax provisions for groups of all stripes litter the tax code, and clearing them out won’t be easy.
But most of the lawmakers weren’t around for the last tax overhaul, in 1986, and many longtime tax aides say they are seriously underestimating the degree of difficulty that comes with uprooting hundreds of provisions. Many predict they will have no easier time undoing loopholes that have been in the code for decades than they’ve had rolling back Obamacare.
“Oh my Lord, people come out of the woodwork,” said Dean Zerbe, a former congressional tax aide.
.. Still, even though they’re caricatured as special-interest breaks, many of the narrow provisions are for average people doing mostly average things.
.. One problem for tax reformers is that many of the biggest provisions that would go furthest towards financing a tax-code rewrite — like the deductions for mortgage interest and charitable contributions — have become all-but-untouchable.
.. On the other hand, it’s also tough for lawmakers to go after smaller ones, especially those benefiting politically popular groups, because they promise difficult fights over relatively little money. Section 107, for instance, excuses a “minister of the gospel” from paying taxes on the share of her income deemed to be a housing allowance.
.. So one trick for Republicans will be knowing which provisions are big enough to fight over, when it comes to raising cash, but not so large that they cannot be undone.
.. many predict Republicans will be forced to settle for something more narrow, like a tax cut that’s partially paid for, in order to reduce the number of losers to a more doable level.
McConnell’s Calculation May Be That He Still Wins by Losing
When it comes to managing Republicans’ best interests, Senator Mitch McConnell of Kentucky, the majority leader, rarely loses. So it is possible that Mr. McConnell views the potential failure of a hastily written health care bill as an eventual boon.
.. As Democrats immediately took to the Senate floor to excoriate the bill and the secretive process in which it was put together, few Republicans, even those involved in crafting it, came to defend it.
.. Four others went further. Senators
all said they would not vote for the bill as currently proposed.
.. Mr. McConnell and many of his aides are also eager to get to the business of changing the tax code, which they view as less difficult than health care, and have been working with the White House behind the scenes to get that effort started. For Mr. McConnell, cutting taxes is a much higher priority than health care
Boehner: Trump has been a ‘complete disaster’
“Everything else he’s done [in office] has been a complete disaster,” Boehner said during a question-and-answer session at a conference in Houston on Wednesday. “He’s still learning how to be president.”
.. Boehner praised the president for his handling of international affairs and foreign policy, especially his aggressive stance toward the Islamic State... Talk of tax reform, another legislative priority for Trump and the Republican-controlled Congress, is just “happy talk,” Boehner said. “I was a little more optimistic about it early in the year; now my odds are 60/40.”
Don’t Bet against Tax and Health-Care Reform in 2017
Amid all the Russia controversy, Trump and the GOP Congress can get it done.
.. Look, the House has already passed a repeal and replace of Obamacare. And a Senate health-care working group led by Lamar Alexander and Ted Cruz is making progress resolving key issues between moderates and conservatives. There’s no reason why the AHCA can’t become law by the August recess.
And that opens the door for taxes.
.. Representative Peter Roskam, who chairs the tax-policy subcommittee, said this last week: “I’m of the view that 2017 is the year.” He thinks tax reform is easier than replacing Obamacare.
.. So following a markup, Ways and Means can report out a bill. And because prosperity is America’s Number One issue, it will pass the floor relatively easily. And that will put pressure on the Senate to get moving.
.. the very core of the tax bill is a simple three steps:
- a deep corporate-tax-rate cut,
- immediate expensing for new equipment of all kinds, and
- the repatriation of offshore cash.
This is the tonic that will restore capital formation, productivity, real wages, and growth.
Both Senate and House leaders have got to understand how flexible reconciliation is. It can be nearly anything you want it to be. The key player is Senate president Mike Pence, who can overrule the parliamentarian.
.. Treasury Secretary Steven Mnuchin
.. “What I have said repeatedly is that any plan we put forward we believe to be paid for with economic growth.”
.. And lowering marginal tax rates across-the-board, especially on large and small businesses, will foster the mother of all prosperities — the one middle-class Americans in all those red counties that voted for Trump have been yearning for.