Tax Update (March 18)
The House Ways and Means Subcommittee on Select Revenue Measures held a hearing this past Tuesday (Mar. 12) which discussed the fate of the tax extenders package moving forward, as well as the overall impact of temporary tax policy in the United States. Republicans and Democrats on the committee, as well as many of the witnesses, largely agreed that uncertainty as a result of temporary tax policy remains a concern for individuals, families, and businesses. The hearing was contentious at times, with Republicans defending the 2017 Tax Cuts and Jobs Act (TCJA) as a positive on middle-class families and businesses alike, while Democrats continued to question who benefited most from the tax overhaul. 29 federal tax breaks expired in 2017 and 2018, with still no extenders package stemming as a result. For a detailed summary of the hearing, click the following link: Select Revenue Measures Hearing 031319.
Mnuchin FY20 Budget Hearings
Treasury Secretary Steven Mnuchin testified in a pair of hearings this week on Capitol Hill on the recently released president’s budget. Mnuchin testified before the Senate Finance Committee on Thursday (Mar. 14) where Mnuchin was pressed by Senate Democrats on his financial holdings and certification of his disclosures, which have been delayed. The secretary remained adamant that he followed proper protocol and is in compliance with the department’s ethics standards. Mnuchin’s 2018 financial disclosure has yet to be certified after it was filed more than eight months ago. Mnuchin’s office stated the deadline for certification had been extended to April 5, due to the partial government shutdown earlier this year.
Mnuchin also appeared on Thursday (Mar. 14) before the House Ways and Means Committee where Democrats questioned the secretary over the potential release of President Trump’s tax returns. “We will follow the law and we will protect the president as we would protect any individual taxpayer under their rights,” he said.
Mnuchin’s response comes as House Democrats prepare to file a formal request which would force President Trump to release his tax returns to Congress. Though such filings are normally confidential, a nearly 100-year-old law allows the heads of Congress’ tax committees to examine anyone’s returns. Experts say lawmakers can vote to make those filings public.
On Thursday (Mar. 14), Sens. Pat Toomey (R-PA) and Doug Jones (D-AL) introduced S.803 to fix a provision in the TCJA that adversely affects the retail and restaurant industries. The bill, which is to amend the Internal Revenue Code of 1986 to restore incentives for investments in qualified improvement property, also features eight other bipartisan cosponsors.
In a March 13 release, Sen. Tammy Baldwin (D-WI) and House Ways and Means Committee member Bill Pascrell Jr. (D-NJ) announced legislation that would tax carried interest income at ordinary income tax rates, instead of at the long-term capital gains tax rate permitted by current law.
The No Tax Breaks for Outsourcing Act would end tax incentives for outsourcing jobs and offshoring profits and the Stop Tax Haven Abuse Act would crack down on use of tax havens. The bills were introduced by House Ways and Means Committee member Lloyd Doggett (D-TX) and Senate Finance Committee member Sheldon Whitehouse (D-RI). For more details on the bills, click here.
There’s bipartisan consensus on Capitol Hill that relying on the federal fuel tax to fund surface infrastructure projects is no longer a viable option, but the alternatives — including a carbon tax — are not yet ready for implementation.