Summer Could Be Tax Package’s Last, Best Hope

Summer Could Be Tax Package’s Last, Best Hope

The June-July summer session is the best remaining chance for the Senate to act on the House-passed tax package, a top Finance Committee staffer said May 30.

Jonathan Goldman, senior tax counsel to Finance Committee Democrats, arrived at that conclusion largely by discounting the chances of the $79 billion Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) advancing in the Senate’s September and post-election sessions.

“If we’re unable to get it passed now, it’s hard to see an avenue by which we move forward before really, to be honest, like late 2025,” when most Tax Cuts and Jobs Act provisions expire, Goldman said at a Federal Bar Association conference.

The Senate returned June 3 from its Memorial Day break for three weeks in June and three weeks in July.

“There’s not a ton of days left in the calendar,” Goldman said. “They’re gone in August. They’re gone in all of October. They deal with funding primarily in September.” Meanwhile, it can be challenging for lawmakers to pass something as complex as a tax package in the post-election, lame-duck session, he said.

If the bill were to come to the floor, it would get overwhelming support from Democrats, at least in the range of what it got in the House, Goldman said.

Among Finance Committee Democrats, only Sen. Elizabeth Warren of Massachusetts has come out against the legislation. The bill passed the House 357 to 70, which amounts to 84%, although 88% of Democrats voted for it. Senate Democrats haven’t come out with a count of how many of their members would vote for the bill, but the same 88% figure would result in five or six defections.

Tax counsel for the authors of the package — House Ways and Means Committee Chair Jason Smith, R-Mo., and Senate Finance Committee Chair Ron Wyden, D-Ore. — were comparatively upbeat about the bill.

While it will be up to Senate Majority Leader Charles E. Schumer, D-N.Y., to bring the bill to the floor, the House vote sends a strong message that bipartisan tax legislation can be negotiated, said Derek Theurer, chief tax counsel for Ways and Means Committee Republicans.

“I don’t know if you watch what’s happening in Congress very often but getting 84% of the House to agree the sky is blue is an achievement,” Theurer said.

Crapo Complaints

House Democrats also would love to see the tax package become law, but the bill’s “prospects seem to be fading very, very fast,” according to Andrew Grossman, chief tax counsel for Ways and Means Committee Democrats.

Wyden had hoped for quick action by the Senate following the House’s Jan. 31 vote, but the bill instead has been stalled for four months.

While Schumer has taken the procedural step necessary to bring the tax bill to the floor, he has said he is waiting until he’s certain the bill has the votes. In the Senate, it takes 60 votes to make legislation filibuster-proof. At least 10 Republicans would have to break ranks with Senate GOP leadership’s opposition to the bill as written. That number would be higher if more Democrats joined Warren in opposing the legislation.

While the business provisions are popular among Republicans — particularly the restoration of full research and development expensing — Finance Committee ranking member Mike Crapo, R-Idaho, has enumerated several problems his caucus has with the bill.

The biggest of those problems is the bill’s expanded refundability features for the child tax credit, said Kate Lindsey, tax policy adviser to Finance Committee Republicans.

But Crapo has voiced support for the Federal Disaster Tax Relief Act (H.R. 5863) — a stand-alone version of the disaster section of the larger tax package — which passed the House but is being held up in the Senate by Wyden. Crapo might support other stand-alone versions, Lindsey said, using the bigger bill’s double taxation fix for the United States and Taiwan as an example.

Crapo has been portrayed by Democrats — and some House Republicans — as blocking the tax bill. Wyden and Crapo have gone back and forth in the press on the issue, with Wyden saying he has offered to get rid of the controversial lookback income provision in the bill and Crapo saying that offer came with strings Republicans couldn’t accept.

Crapo “still remains committed to finding a resolution that the majority of Republicans could support and would like to see something done this year,” Lindsey said.

House Speaker Mike Johnson, R-La., told Semafor that if Republicans win both the White House and Congress, he envisions a “transformational” bill in early 2025 wrapping tax with other GOP priorities such as border security.

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Summer Could Be Tax Package’s Last, Best Hope Could Be Tax Packages Last Best Hope_Hero-1920x1000.jpg?ver=i-NF9lOlfxOmHUiDKU8XHw%3d%3d the complexities and political dynamics as the Senate tackles the significant tax package this summer. Discover the challenges and support it faces.2024-06-07T17:00:00-05:00

Understand the complexities and political dynamics as the Senate tackles the significant tax package this summer. Discover the challenges and support it faces.

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