Congressional Tax Bills that May Affect You And Your Clients

It is anybody’s guess whether Congress will be able to enact a tax reform bill or any tax-related bill this year. However, there are various measures percolating at various stages of the legislative process, so it is wise to keep informed. Below is a chart that summarizes the status of key tax policy legislation currently pending in either the House or Senate.

Topic
Legislative Purpose
Bill Status
Outlook
Tax ReformCorporate, Individual and International
Taxation
(To be introduced) Congressional tax-writers want a revamp of the tax code.House: House GOP tax reform blueprint released in June 2016 calls for a 20 percent corporate tax rate; a shift toterritorial taxes on overseas income under destination-based taxes; a border adjustability provision that would tax imported goods but exempt exports; three tax brackets at 12 percent, 25 percent, and 33 percent for individuals; a 25 percent
tax rate for passthroughs; and a repeal of the estate tax and alternative minimum tax. Senate: Finance Committee Chairman Orrin G. Hatch (R-Utah) had been working on a dividends paid corporate integration idea as a way to eliminate double taxes on corporate income. However, he has not released the plan and has said he is now focused on a broader tax reform effort.
House: Ways and Means Committee Chairman Kevin Brady (R-Texas) and his staff are working on turning the blueprint into legislation and plans to hold hearings in the coming weeks. He has said he will wait to mark up a bill in his committee until seeing more details from the White House plan, which he says is about 80 percent in alignment with what the House wants. The border adjustment tax is facing opposition from big retailers and some members in the House and Senate over concerns it could raise costs for consumers.

Senate: Republican tax counsels in the Senate are looking at previously introduced tax reform plans for ideas. Many of them include ideas to broaden the tax base to lower tax rates. Sen. Hatch has said that his staff is working on a tax plan, but that it was too early to get into details.

White House: The administration released a one-page outline April 26 that would cut the corporate rate to 20 percent. The document doesn’t mention the border adjustment provision of the House plan, a signal that the administration is still working through the issue. The administration is expected to release a more detailed document in June.

Health CareTax Credits
(VETERAN Act) H.R. 2372, introduced May 4 by Rep. Sam Johnson (R-Texas), says a veteran isn’t eligible for health coverage under a Department of Veterans Affairs program unless enrolled. The bill is in response to criticism from Democrats that the American Health Care Act could bar veterans from using tax credits to pay for health insurance if they are eligible but not enrolled in VA coverage.House: The bill passed by voice vote on June 15.
(Verify First Act) Rep. Lou Barletta (R-Pa.) on May 22 introduced H.R. 2581 to require a Social Security number before an individual can receive a health care tax credit. The bill is part of an effort to address concerns with the American Health Care Act.House: The bill passed 238-184 on June 13.
(Broader Options for Americans Act) H.R. 2579 would allow some individuals to qualify for premium tax credits if they continue group health plans under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Rep. Pat Tiberi (R-Ohio) introduced the measure May 19. The bill is part of an effort to address concerns with the American Health Care Act.House: The bill passed 267-144 on June 15.
Corporate InversionsDebt-Equity
(H.J. Res. 54) The legislation disapproves of the final
Section 385 debt-equity rules released in October 2016. It also would use the Congressional Review Act to revoke them.
House: The bill, introduced Jan. 31 by Rep. Todd Rokita (R-Ind.), has been referred to the Ways and Means Committee. A floor vote hasn’t been scheduled.House: Democrats released a letter Feb. 8 criticizing the bill.Senate: No companion legislation has been introduced.
Estate and Gift TaxesEstate Tax Repeal
(H.R. 451H.R. 198H.R. 30H.R. 631S. 205) Several bills have been introduced in
both chambers to repeal the estate tax.
House, Senate: Senate Finance Committee member John Thune (R-S.D.) and House Ways and Means Committee member Kristi Noem (R-S.D.) are the lead sponsors on companion repeal legislation, H.R. 631 and S. 205.House: The House GOP tax reform blueprint includes a repeal of the estate tax. White House: President Trump called for a repeal during his election campaign, replacing it with a capital gains tax for assets held until death.
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