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US Tax Reform

Lame duck tax bill receives lukewarm reception from Democrats

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

Senate Democrats have indicated that they have little enthusiasm for holding votes on a lame duck tax bill, the Retirement, Savings, and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018 (H.R. 88) unveiled by House Republican tax writers earlier this week. Many argued that the bill is being rushed. In addition, Senate Majority Leader Mitch McConnell (R-KY) has given no indication that he plans to take up tax legislation before the end of the year.

There was also a general consensus that any tax legislation could not move separately, rather it would have to be part of a major spending bill that Congress must approve by Dec. 7 in order to avoid a partial government shutdown. The incoming chairman of the Senate Finance Committee Charles Grassley (R-IA) said he believed that Democrats could support the five technical tax corrections for the Tax Cuts and Jobs Act (TCJA; P.L. 115-97) that were included in the legislation. He also added that IRS reform and tax extenders could end up in a final tax package. The retirement savings portion of the bill is unlikely to be addressed, according to Grassley.

House Ways and Means Chairman Kevin Brady (R-TX) told reporters that he still plans to bring up a technical tax corrections measure before the end of the year that would contain over 75 provisions. Brady was confident that the Senate and the House could reach agreement on such a measure. But Democratic votes of support in the Senate are far from assured and Republicans would need all of their members and nine Democrats to vote for the bill. Senator Ben Cardin (D-MD), however, said Democrats may opt to wait until next year when they are in the majority in the House and could exercise more leverage in crafting a technical corrections bill.

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