A new ten percent middle-income tax cut is conditionally expected to be proposed in 2019, according to the House’s top tax writer, House Ways and Means Committee Chairman Kevin Brady, R-Tex., This timeline, although largely already expected on Capitol Hill, departs sharply from President Donald Trump’s original prediction that the measure would surface by November of this year.
Chairman Brady stated, “We expect to advance this in the new session of Congress if Republicans maintain control of the House and Senate”. As noted in previous posts, however, President Trump had said a couple of days before that a” resolution” would be introduced for the tax cut by the week of October 29.
Maintaining control of both houses of Congress through the mid-term elections is far from certain, however, and the future of any such tax cut is clearly unknown at this time.
Democratic lawmakers have been criticizing President Trump’s announcement as nothing more than politically-driven rhetoric ahead of the November 6 elections. Top congressional Democrats have voiced their intent to repeal, at least in part, the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97) enacted last December. Republicans, on the other hand, want to continue building upon the TCJA’s tax cuts. While the future of any proposed middle-income tax cut is unclear at this time, no matter the outcome of the elections, further tweaking of the Internal Revenue Code is almost certain.
Chairman Brady further noted, “What President Trump is looking at is a 10 percent cut focused on middle-class workers and families…he still believes middle-class families are the ones always in the squeeze,” adding that, “We’ve been working with the White House and the Treasury on some ideas about how best to do it.”
At this time, it is considered likely on Capitol Hill that Republicans will retain control of the Senate, but several predictions continue to float that the GOP will lose its House majority. Republicans would likely need to retain control of both chambers for any chance of approving further individual tax cuts or making permanent those enacted under the TCJA.
As noted in an a earlier post, the House approved its “Tax Reform 2.0” package last month, which includes measures to make permanent the TCJA’s individual tax cuts and enhance various savings accounts and business innovation. The Senate has showed little interest in taking up the package as a whole before the end of the year, though consideration of the retirement and savings measure in the lame-duck session remains a possibility.