This week MMG is watching developments around tax reform among lawmakers and groups seeking to influence the process. Plus, a longtime supporter of the middle market announced she has her eye on a Senate seat.
SALT Tax to Remain
The state and local income tax break will not be fully repealed, even though the GOP tax framework released last week suggested otherwise, said New York Rep. Chris Collins, according to Bloomberg. The state and local income tax, or SALT, is a key revenue raiser in the framework laid out by the so-called Big Six last week. In order for any tax reform bill to be permanent, it will need to raise the revenue required to offset any tax cuts. No concrete plans to do so have yet emerged.
House Passes 2018 Budget
In one of the first legislative steps toward tax reform, a 2018 budget resolution has passed the U.S. House of Representatives as of Thursday, per The Hill. The budget included instructions for the reconciliation process, allowing any tax reform bill to pass with a simple, filibuster-proof majority. That process allows Senate Republicans to pass a tax reform package with 51 votes instead of 60. The Senate now must pass its budget, which is expected to have a provision allowing for $1.5 trillion in deficit-financed tax cuts. The House and Senate must pass identical bills, so leaders of both chambers are expected to have a conference to resolve any differences.
Spending to Influence Tax Reform Begins
Sens. Claire McCaskill of Missouri, Tammy Baldwin of Wisconsin and Joe Donnelly of Indiana will be some of the first Democrats to fall under heavy pressure from conservative groups surrounding the tax reform push: Political advocacy group Americans for Prosperity has announced $4.5 million in ad buys to exert pressure on the Senators, Axios reports. Thus begins the heavy spending from a variety of factions trying to influence the tax reform process.
For an inside look at the many different influencers that might try to affect the process, check out “Showdown at Gucci Gulch,” a fascinating book about the 1986 tax reform process.
Sinema Announces Senate Bid
Arizona Rep. Kyrsten Sinema has announced that she will seek Republican Jeff Flake’s Senate seat, The Washington Post reports. Sinema is a longtime supporter and champion of the middle market. She spoke at ACG Global’s Public Policy Summit in September. Read a recap of her remarks.
Ben Marsico works on public policy issues for ACG.