With just 44 scheduled legislative days left in 2017, the clock is ticking on a major priority for congressional Republicans and the administration: comprehensive tax reform. Over the past few weeks, the White House amped up its efforts on tax reform, with the President Trump speaking in both North Dakota and Missouri to encourage Congress to lower tax rates and simplify the tax code. The president remains open to bipartisan tax reform efforts, while congressional Republicans have yet to include Democrats in their discussions.
Key county priorities remain in the crosshairs of tax reform discussions: both the tax-exempt status of municipal bonds and the deductibility of state and local taxes could be potential “pay-fors” in order to lower tax rates.
Last week, President Trump met with members of the “Big Six” coalition - House Speaker Paul Ryan (R-Wis.), House Ways and Means Chairman Kevin Brady (R-Texas), Leader McConnell, Senate Finance Committee Chairman Orrin Hatch (R-Utah), Treasury Secretary Steven Mnuchin and National Economic Council Chairman Gary Cohn - to discuss their ideas and concerns on a tax overhaul. Reports indicate many issues must be worked out before this group will coalesce around a specific tax plan. One of these outstanding issues is how low to set a new corporate tax rate. President Trump is seeking a 15 percent tax rate, while congressional leaders have suggested aiming for a 22.5 percent corporate tax rate is more realistic.
Lawmakers are growing increasingly anxious to see specific details of a tax reform plan. Republicans on the Senate Budget Committee, tasked with crafting the budget resolution that would allow Republicans to pass a tax overhaul without the required 60 votes in the Senate, have grown frustrated about the lack of details as they work on their FY 2018 budget. Across the Capitol, House Freedom Caucus leaders, some of the more conservative members of the House, are also requesting more specific tax reform plans from the White House.
NACo continues developing resources and materials to support both the tax-exempt status of municipal bonds and the state and local tax (SALT) deduction in tax reform efforts. In fact, last week NACo released new county-by-county SALT profiles to help illuminate the wide-spread impact and importance of the SALT deduction.
There is still significant ground to cover, but a tax overhaul remains a top priority for President Trump and Congressional Republicans. NACo will continue to monitor tax reform efforts and advocate for key county priorities as the process moves forward.
Additional NACo Resources: