Wyden Still Confident About Tax Bill

Senator Ron Wyden (D-OR) refused to speculate about the failure of the bipartisan tax bill — which has remained stalled in the Senate since January — at a Tax Council Policy Institute meeting this Thursday.

Wyden, Chair of the Senate Finance Committee, spoke to corporate tax leaders on May 16 about the origins of the Tax Relief for American Families and Workers Act (HR 7024) and the road ahead for tax reform. The bipartisan bill, he said, came out of a lunch with House Ways and Means Committee Chair Jason Smith (R-MO) where Wyden proposed “break[ing] the gridlock” and starting with “straightforward principles.” In Wyden’s view, bipartisanship is about taking each other’s good ideas and building common ground around them — and he and Smith did just that.

Republicans, said Wyden, were focused on research and development, interest expenses, and depreciation provisions. Meanwhile, Democrats, “also wanted something for families, particularly on the Child Tax Credit and housing.” By developing a “game plan” that involved going to the “four corners” — Senate and House leadership for each party — Wyden explained that the bill amassed broad bipartisan support, passing the House 357-70 in January.

“Member after member on the Democratic side got up and said, ‘this wouldn’t have been the tax bill I would have written,'” said Wyden. But they felt strongly about the Child Tax Credit and they felt strongly about research and development, so they supported the legislation.

Child Tax Credit.

The sticking point in the bill for Senate Republicans, Wyden explained, was a concern that the Child Tax Credit — specifically the look-back provision in that credit — would discourage work. This, he said, was despite a report from the Joint Committee on Taxation that said the credit would be a “plus” for work, because people would get help with childcare.

On the look-back provision, Wyden said he told Senate Republicans, “if this is important to you, I will take it out in an effort to try to find common ground.” But despite finding a way to take out the provision without putting more kids into poverty, said Wyden, Senate Republicans, through their ranking member, rejected the proposal. Wyden called that action “unfortunate,” adding that “that’s the way you write legislation — you listen to people, you hear their big concerns.”

The road ahead.

Though Senate Republicans are still not on board, Wyden seemed optimistic about the bill’s future. He sensed that Senate Republicans were inclined to wait until 2025, when many key provisions of the Tax Cuts and Jobs Act (PL 115-97) will be expiring, to take action. However, that “struck people as kind of odd,” he said. Small businesses, for example, need help with research and development now to meet expenses, including payroll. And there is growing concern about interest rates.

“You always have to look at where you are, and slightly back, if you try to go forward,” said Wyden. He drew a parallel to efforts on climate change and using carrots in the Tax Code rather than sticks to reduce carbon emissions.

As far as long-term tax reform, Wyden said he was considering once again putting out a menu of tax alternatives to show what’s “on offer.” With a lot of retirements in the Senate Finance Committee expected, Wyden said this menu would be useful to new members.

Wyden suggested reaching out to Republican senators about the bipartisan tax bill, and said he is working with Majority Leader Chuck Schumer (D-NY) to get a time scheduled for the Senate to consider the bill.

“What does it say about doing a big bill in 2025 if you can’t get this started?” he asked, adding, “that’s why I’m all in.”