In the Nation's Interest
What You Need to Know About the Administration’s “Joint Statement on Tax Reform”
by Joe Minarik July 28, 2017
1. The agreed-upon tax reform program will not make use of the so-called “border-adjustment” feature.
2. It will not be a consumption tax.
3. It will be proposed to be permanent (i.e., there will be no expiring provisions).
4. It will cut tax liabilities and tax rates for large businesses (i.e., public corporations), small businesses (i.e., “pass-through entities”), and households as much as possible.
5. It will make some concession to repatriation of corporations' foreign earnings.
6. It will accelerate the recovery of business capital expenses.
7. It will be considered “under regular order.”
This last point is the key. As normally translated from Wonkish into English, this says that the tax legislation will not be pursued under the budget process and “reconciliation.” This means that (1) the tax bill can proceed even if the Congress continues to struggle with health care policy under the existing reconciliation instruction from the fiscal year 2017 budget resolution; (2) the tax cut will need 60 votes in the Senate to cut off debate; and (3) the Congress will be under no obligation to achieve “deficit neutrality” (although this may require “waivers” from House or Senate rules through floor votes, which will be easy to get if there is support for the proposal itself). This also in a natural way circumvents the need to avoid revenue losses beyond the time horizon of a budget resolution.
So the House and Senate majorities plan to put tax cuts on the table, and to try to pick off at least eight votes from Senate Democrats who choose not to vote against a tax cut.