House Republicans on July 24 unveiled a broad framework for the next phase of tax reform, which would make permanent tax cuts for individuals and small business owners that were enacted in last year’s tax law.
Dubbed “Tax Reform 2.0,” the package has three distinct objectives: making the individual tax cuts permanent, promoting retirement savings, and helping new businesses write off more of their initial start-up costs.
“Every day, businesses wake up and ask themselves, ‘how do we become more competitive, innovative and better?’,” said Ways and Means Chairman Kevin Brady (R-TX). “That practice has always been foreign to Washington. That ends now. With this framework, we are taking the first step to change the culture in Washington DC where tax reform only happens once a generation.”
Brady said he expects to introduce three separate bills to cover each objective and wants his committee to vote on the package in September. While “Tax Reform 2.0” could get out of the House this fall, it is likely to falter in the Senate where it would need support from Democrats to pass.
Ways and Means Ranking Member Richard Neal (D-MA) said the Republicans’ tax plan doesn’t help the middle class get ahead. “This new framework is more of the same – it rewards the well-off and well-connected, fails to reinstate to state and local tax deduction, and leaves the middle class behind,” Neal said. “All the while, Republicans are saddling future generations with trillions of dollars of debt and setting the stage to cut programs like Medicare and Social Security.”