Legislative Activity

Ways and Means Committee Kicks Off Tax Reform Efforts with First Public Hearings

On Thursday, May 18, the House Ways and Means Committee held a hearing titled “How Tax Reform Will Grow Our Economy and Create Jobs.” The hearing – which is the first in what is expected to be a series of hearings on tax reform – examined tax reform policies that will “generate economic growth, create jobs, and increase paychecks for all Americans.” Members and witnesses spent time discussing specific policy proposals that they viewed as critical to tax reform.

Overall, the hearing was predictable and did little to move the needle on tax reform. Though all parties recognized the need for tax reform, Democrats pushed back against the Republican approach for failing to adequately address the needs of the middle class. During the hearing, Rep. Devin Nunes (R-CA) confirmed that the Committee will hold multiple hearings on tax reform over the next several months. Next week, the Committee will hold a second hearing on increasing U.S. competitiveness, which is expected to focus on the border adjustable tax (BAT); the Committee will also hold a hearing next week on the tax policies contained in the President’s forthcoming Budget.

In addition to efforts in the House, both the Senate and the White House are moving forward with their proposals for tax reform. In the Senate, Finance Committee Republicans are beginning to put together their own bill by (according to staff) by examining previous proposals to serve as the foundation for their legislation. As for the White House, the Administration is actively seeking input and taking a more active role in tax reform than in healthcare reform. For example, Secretary Mnuchin and National Economic Council Director Gary Cohn last week held a bipartisan briefing with Finance Committee Members to discuss tax reform and next steps. Note that, despite speculation to the contrary, Secretary Mnuchin last week confirmed that the Administration’s FY 2018 Budget – which is due to be released on Tuesday, May 23 – is not expected to contain details on President Trump’s forthcoming tax reform plan.

Though both the Administration and congressional tax-writers are engaged and meeting on a regular basis, there remain key differences that will need to be resolved if tax reform efforts are to be successful. That said, the House, Senate, and White House are all working together to develop a unified tax plan; despite the initial goal of wrapping up tax reform by August, policymakers have expressed a commitment to doing tax reform in a deliberate way, with the timing now less in focus. As such, the likelihood that final action on tax reform slips until later in the year is increasing, as the politics of tax reform – and the Trump Administration generally – are slowing the process.

This Week’s Hearings:

  • On Tuesday, May 23, the House Ways and Means Committee has scheduled a hearing titled “Increasing U.S. Competitiveness and Preventing American Jobs from Moving Overseas.”
  • On Tuesday, May 23, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a hearing titled “IRS Oversight.” The witnesses will be:
    • The Honorable J. Russell George, Treasury Inspector General for the Tax Administration; and
    • Ms. Nina E. Olson, National Taxpayer Advocate, Internal Revenue Service
  • On Wednesday, May 24, the House Ways and Means Committee has scheduled a hearing on the President’s Fiscal Year 2018 Budget Proposals. The witness will be:
    • The Honorable Steven Mnuchin, Secretary, United States Department of the Treasury
  • On Thursday, May 25, the Senate Finance Committee has scheduled a hearing to examine the President’s proposed budget request and justification for fiscal year 2018 for the Department of Treasury and tax reform. The witness will be:
    • The Honorable Steven Mnuchin, Secretary, United States Department of the Treasury