President Trump and his administration have turned their focus to Tax Reform, a major point of the campaign. In a recent Wall Street Journal interview, Treasury Secretary Steven Mnuchin said that he expects the administration, along with top Republican lawmakers, to release a more detailed tax reform plan sometime in the next few weeks. The administration has determined that a joint roll out of the tax reform package (rather than one offered by the administration alone) will enhance its chances of quick action by both chambers of Congress.
To streamline the process a smaller group of Republicans has been assembled to craft the initial legislative proposal. The principal figures leading the efforts in tax reform, known as “The Big Six,” are Mnuchin, House Speaker Paul Ryan, R-Wisconsin., Senate Majority Leader Mitch McConnell, R-Kentucky, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, and House Ways and Means Committee Chairman Kevin Brady, R-Texas.
The White House and top GOP lawmakers are expected to first release a three-to-five-page tax reform outline in early- to mid-September. The actual language for the legislation will be crafted by taxwriters in the Senate Finance and House Ways and Means Committees, but the President and his team plan to stay actively involved throughout the entire process of tax reform. Mnuchin noted in his WSJ interview, “In no way are we just turning this over to Congress.”
In a speech on August 30, President Trump said he does not want to be disappointed by Congress on tax reform. He has recently expressed criticisms of Congress after the failed efforts of the GOP to repeal and replace the Patient Protection and Affordable Care Act (ACA), but is looking forward to better success with the tax legislation. “I think Congress is going to make a come back… I hope so.” Trump said.
Tax reform, and especially a coordinated effort with Congress, seems a stronger bet for the President. However, many of the initiatives Trump discussed and promised to his constituents throughout the campaign may be unachievable simply on the basis of “cost.” In any case, the autumn of 2017 will prove to be dynamic with Congressional tax reform debate and the President’s proclivity towards expressing his thoughts openly and frequently.
The goal is to finish tax reform by the end of the year. As such, it is likely that many, if not all of the provisions, will be effective beginning on January 1, 2018.
Of course, Grossman Yanak & Ford LLP will be monitoring developments on a daily basis and will communicate with our clients and friends as appropriate. If, however, you have comments or questions concerning the tax reform proposals as they are released, please contact Bob Grossman or Don Johnston.