Ways and Means Committee Chairman Kevin Brady (R-TX) confirmed this week he expects to have another tax bill, dubbed “tax reform 2.0,” ready before the House breaks for the August recess.
The White House and House leaders are interested in changes to the tax code that would serve as a follow-up to the tax law enacted last year. Brady and other Republicans on the tax-writing committee say they want to make improvements to the tax code on a more regular basis, as opposed to once-in-a-generation reform.
Brady’s top priority for a second tax bill is to make permanent the tax cuts for individuals that were included in the new tax law but are set to expire after 2025. These cuts include the larger standard deduction and child tax credit.
“Permanency will be the centerpiece of it,” Brady told POLITICO this week. “We want to focus really, right now, on the policy side.”
Any “tax reform 2.0” bill is likely to include other tax changes as well, including incentives designed to boost business innovation and encourage retirement savings. Brady and the White House have been discussing cuts to capital gains taxes as well, either through lowering rates or indexing capital gains to inflation.
While House Republicans are bullish another tax bill can pass the House this year, odds are slim in the Senate where there are no plans to pass any legislation using reconciliation this year and it seems unlikely that nine Democrats would back another round of tax cuts and get the bill over the 60-vote threshold.
In addition to the second tax bill, Brady says a technical corrections bill to fix some “glitches” in the tax law could be introduced this fall as well. Brady said the contents of a technical corrections bill will be influenced by what Treasury is able to address through forthcoming guidance.