White House to Release Some Tax Plan Details Next Month, Official Says

  • Congressman Brady says tax revamp is on schedule for 2017
  • Chief House tax writer says 3.8% Obamacare tax is ‘challenge’

Rep. Kevin Brady, a Texas Republican and chairman of the House Ways and Means Committee, discusses the prospects for U.S. tax reform with Bloomberg's David Gura on 'Bloomberg Markets.' (Source: Bloomberg)

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White House tax negotiators and congressional leaders are still planning to release a document in September outlining agreed-upon principles that will serve as a framework for a tax bill, according to a White House official.

The document is expected to expand on a two-page press release last month from the so-called Big Six involved in tax discussions, said the official who asked not to be named because negotiations are private. It was unclear after that press release was issued if there would be additional details forthcoming before tax writers started drafting legislative text. National Economic Council Director Gary Cohn, a member of the Big Six, had previously said a tax framework would be released after Labor Day.

Kevin Brady, chairman of the tax-writing House Ways and Means Committee, said during an interview Friday on Bloomberg TV that House and Senate tax writers were continuing to work on the details of a revamp over the August recess.

“We are on schedule to move this to the president’s desk this year,” Brady of Texas said. “It is an aggressive timetable, no question about that.”

Trump administration officials have said they’re committed to a permanent tax overhaul, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November. President Donald Trump and Senate Majority Leader Mitch McConnell of Kentucky have sparred in recent days over the amount of time needed to pass complicated legislation, such as repealing and replacing Obamacare.

Balancing Act

Reuters reported Thursday that the White House and congressional leaders would be releasing a three- to five-page document outlining tax principles in early to mid-September. The page range hasn’t been firmly set, the White House official said.

A tax overhaul will require a delicate balancing act, and one that has bedeviled negotiators in the past. A major tax revamp hasn’t been passed in more than three decades, and the Trump administration is under pressure after another legislative effort -- repealing and replacing the 2010 health-care legislation -- failed last month.

The White House has said it wants to lower corporate and individual tax rates, eliminate deductions and simplify the code. Despite the administration and lawmakers’ assurances on timing, many obstacles and unanswered questions remain about how to offset cutting tax rates with new revenue so the tax changes can be permanent under congressional budget rules.

Obamacare Tax

Brady acknowledged some of the sticking points during the interview Friday. He said cutting the rate for pass-through entities to 15 percent, as Trump has called for, is a “big lift.” He also said whether a tax bill should include the repeal of 3.8 percent net investment income tax on top earners enacted to help fund Obamacare is “a challenge.”

“If it didn’t pass the Senate in the health-care bill why would you think it’d pass the Senate in the tax reform bill?” Brady said, referring to the 3.8 percent levy.

Brady also said no final decisions had been made on allowing companies to fully deduct their capital spending from income immediately instead of over years.

Still, he said having Trump to help sell a tax overhaul would be an asset.

“I think the president is all in on tax reform,” Brady said. “I’m pretty optimistic about his ability to use his unique bully pulpit to make the case for why what we have isn’t working.”

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