The new congressional session launched last week, and the top tax writers in both chambers are seeking to build on the $680 billion tax package enacted late last year by turning their attention to international reform.
Senate Finance Committee Chair Orrin Hatch, R-Utah, said last year’s massive tax compromise should pave the way for bigger tax changes in 2016 and 2017. The bill included more than 100 tax provisions and made more than 20 of the most popular provisions permanent (see Tax Legislative Update 2015-07
for a full discussion of the bill). The result is a major change in the revenue baseline, meaning future tax reform proposals would need fewer revenue raisers to be considered revenue neutral.
Hatch and House Ways and Means Committee Chair Kevin Brady, R-Texas, agreed that the focus in 2016 should return to tax reform. But major legislative changes are difficult in a presidential election year, and Brady acknowledged that 2016 would be more about “laying the foundation” for tax reform in 2017 and 2018. Lawmakers are particularly focused on international reform.
House Speaker Paul Ryan R-Wis., tried to reach agreement with Democrats on international-only reform to accompany a highway spending bill last year before negotiations faltered and he became House speaker. He has since said the House should lay down a policy marker by advancing international reform this year even if it has no chance of becoming law, although Brady and Hatch have been slightly more optimistic about the chances of actual compromise with Democrats in an election year.
House Republicans will discuss the tax agenda for the new year in their retreat this week, but first, Brady may not be done with last year’s $680 billion tax package. He said Congress may need to revisit the bill with some corrections. The final agreement came together quickly, and the 100-plus tax provisions were rushed to the floor so that Congress could adjourn for the holidays. He specifically acknowledged that some Democrats were disappointed that the deal didn’t extend the investment tax credit under Section 48 for several energy sources besides solar.
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.