Inside the lame-duck tax package
Just when you thought the last word has been spoken on tax legislation for 2018, the House Republicans, in a “lame duck” move, unexpectedly released some more last week -- the Retirement, Savings, and Other Tax Relief Act of 2018, which they scaled down on Monday of this week.
The revised legislation eliminates many of the extensions to expiring tax provisions that were in last week’s proposal, but retains technical corrections to the Tax Cuts and Jobs Act, changes to the tax treatment of retirement savings, and changes to the operation of the IRS, and puts an emphasis on tax relief for disaster victims. (For more, see "House Republicans retool year-end tax legislation.")
“Each of these proposals have received the support of Republicans and Democrats in both the House and the Senate – this bill will make a big impact for our communities nationwide,” said Kevin Brady, chairman of the Ways and Means Committee. “Working in a bipartisan manner with the Senate, we’ve reached solid common ground on our efforts to redesign the IRs. “
“Congress has an excellent opportunity to meld the best parts of these two bills into an impressive package,” the National Taxpayers Union Foundation stated.
It urged that the package be augmented by the several provisions contained in S. 3278, the Taxpayer Protection Act, sponsored by Senators Portman and Cardin, who as House members had important roles in the development of the IRS Restructuring and Reform Act of 1998.
“Lame ducks are always what they are,” said Tom Reynolds, a former member of Congress and current senior policy advisor at law firm Holland & Knight. “Many who want something to move forward are working to see if something can happen, and if it does, then they might begin negotiation on what should be included.”
“The big question is whether there is any inclination in the Senate to do this and whether they can get any Democrats to support it. Also, [Senate Majority Leader Mitch] McConnell has kept expectations quite low. I’ve not heard him say that they’ll do this tax bill.”
“The original expectation was that any tax package will be attached to a year-end spending bill, but now it looks like they will need more time to work out a deal due to the passing of former President George H.W. Bush,” said Dustin Stamper, a managing director in Grant Thornton’s Washington National Tax Office. “We think they’ll get a seven- to 10-day extension, with the eventual goal to get through the end of the current fiscal year. But there’s also the possibility that we have a government shutdown with a fight over spending for the wall.”
“The Senate Democrats don’t seem eager to allow the Republicans to fix anything on tax reform,” said Stamper. “And Chairman Brady didn’t really like the extender provision – essentially, he had offered the tax extenders to the Senate in exchange for five pretty narrow technical corrections. A couple of them already had recent Democratic support – 16 Senate Democrats have already indicated in a letter to the Treasury that they want Qualified Opportunity Zone properties to qualify for bonus depreciation. ... But we have to wait and see.”