Congressional leaders are now looking at a potentially contentious end-of-year spending and debt-limit fight, creating even more uncertainty as to whether tax reform legislation will happen this year.
House Ways and Means Committee Chairman Kevin Brady (R-TX) insisted again this week that tax reform must happen this year so that lawmakers are not voting on major tax changes so close to the 2018 mid-term elections. The fall calendar was already going to be packed but was complicated further by the need for emergency funding for Harvey victims in Texas and potentially more disaster aid needed after Hurricane Irma hits Puerto Rico and Florida later this week.
President Trump made his pitch for tax reform in North Dakota this week, promising “major, major tax cuts” for individuals and lowering the business rate as much as possible, ideally to around 15 percent. The top corporate tax rate is currently 35 percent.
Speaker Paul Ryan (R-WI) said at an event in Washington, DC yesterday that 15 percent might not be realistic, but that tax writers’ goal is to be “at or below the industrial world average” of 22.5 percent.
Brady and Ryan have been short on specifics about their tax plan, including which tax benefits might be tapped to pay for lowering tax rates. Rank-and-file members have said they need to see details before they back the fiscal year 2018 budget resolution, which contains instructions for passing a tax bill through reconciliation which requires only 51 votes (and not 60) in the Senate.