The White House and Republicans in Congress continue to discuss a second round of tax reform, according to National Economic Council Director Larry Kudlow, the President’s top economic advisor. Mr. Kudlow made his comments in an April 5 interview, noting that the President and House Ways and Means Committee Chairman Kevin Brady (R-TX) spoke earlier in the week again about a “phase two” of tax reform.
The President and most GOP lawmakers agree that full expensing for business investments and individual tax cuts should be made permanent, according to Mr. Kudlow. Those specific tax changes are temporary provisions under the Tax Cuts and Jobs Act (TCJA), signed by the President on December 22, 2017.
The President reiterated his support of the expensing provision, in particular, while speaking at an April 5 round table event in West Virginia. During that speech, Mr. Trump praised the merits of the full expensing provision of the TCJA, noting, “I think it’s going to be the greatest benefit of the whole bill.”
According to Mr. Kudlow, there are other ideas also being discussed that could ultimately become part of the plan, but he did not elaborate on specifics.
What to Expect in the 2018 Income Tax Filing Season
Mr. Trump also spoke to the tax return filing process and the changes included in the TCJA that are expected to simplify income tax filings for most Americans. He noted that, “Next April, you’re going to, in many cases, [file on] one page, one card…you’ll have a nice simple form next year.”
Changes Advanced by the Democratic Electorate
Most Democratic lawmakers continue to criticize the tax law changes under the TCJA. Nancy Pelosi (D-CA)House Minority Leader, said in an April 6 statement that only corporations and the wealthy benefit from the new law. “Powerful special interests are reaping massive windfalls from the GOP tax scam…,” Ms. Pelosi said.
Earlier in the week, while speaking at a tax event, Ms. Pelosi reportedly said that Democrats would take a bipartisan approach toward revising the TCJA if they regain the House majority in 2019. According to Pelosi, Democrats are interested in creating a tax bill that creates growth and jobs while simultaneously reducing the deficit.
It is difficult at this time to determine if there will actually be another tax bill brought to the floors of the House and Senate this summer. Consternation among all members of Congress, but especially Republicans, leads many commentators to think that the mid-term elections will be the primary focus of both Chambers in the coming months, and that most activity moved forward in Congress, is expected to be undertaken with the elections in mind. As such, there will continue to be a very deliberate approach to any and all legislative decisions until the elections are over.