Senate Leaders Talk Tax Reform
Senate Republicans are planning to move tax reform legislation through the budget reconciliation process this fall, Senate Majority Leader Mitch McConnell announced on August 1. Only 50 Senate Republican votes, as opposed to 60, are needed under reconciliation, with Vice President Pence serving as the tie-breaking vote.
McConnell made the statement after receiving an August 1 letter from Senate Democrats outlining their prerequisites for bipartisan tax reform, though he noted that he did not want to give up on the prospect of having Democratic support behind tax reform legislation. Congress intends to take up tax reform when lawmakers return to Washington after Labor Day, according to McConnell. Under the Constitution, the process will start in the House.
The Senate Majority Leader’s declaration follows a joint statement issued by the so-called “Big 6” – McConnell, House Speaker Paul Ryan (R-WI), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) – outlining their broad goals for tax reform. The statement makes clear the group’s desire to deliver results before the end of the year: “Our expectation is for this legislation to move through the committees this fall, under regular order, followed by consideration on the House and Senate floors. As the committees work toward this end, our hope is that our friends on the other side of the aisle will participate in this effort. The President fully supports these principles and is committed to this approach.”
We will keep you informed as the process moves forward. If you have any concerns, feel free to contact our office to discuss how the possible legislation may affect your tax planning.