The Joint Committee on Taxation has estimated that the projected macroeconomic impact of the recently advanced House Republican tax bills is too small relative to the size of the economy to be significant in their economic models, and the revenue score remains unchanged.
The House Ways and Means Committee recently advanced a trio of tax bills outlining Republican priorities for the rest of the year, including restoring R&E expensing under Section 174, extending bonus depreciation, and providing relief from the interest deduction limit under Section 163(j). The bills are unlikely to be enacted in their current form, but could be a starting point for negotiations with Democrats on a year-end package (see our prior story for more information).
The House now appears unlikely to vote on the bills before the August recess, but this may ultimately be relatively unimportant to the legislative outlook. Regardless of whether the bills pass the House, Republicans will need to compromise with Democrats to get anything enacted. Negotiations remain largely dormant, and the new JCT economic analysis did not get much reaction from either party. There is little urgency among lawmakers, and the best hope for addressing tax priorities may be in a year-end deal.
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