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House and Senate finalizing budget documents, paving the way for tax reform

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    House and Senate finalizing budget documents, paving the way for tax reform

    On October 5, the U.S. House of Representatives approved a budget blueprint for 2018 directing lawmakers to pursue a tax code overhaul through the budget reconciliation process, which allows for approval through a simple majority vote in the Senate. However, the House-approved budget differs significantly from the proposal currently under consideration in the U.S. Senate, especially in terms of how to pay for the tax plan.

    The House document contains significant entitlement cuts to pay for tax reform, which helps balance the budget over the next 10 years. This provision is likely to receive pushback in the Senate, where tax writers are expected to approve a debt increase of $1.5 trillion in their budget, which would be offset by economic growth from tax reform. The Senate Budget Committee approved its budget on October 5 on a party-line vote, and lawmakers plan to bring the measure to the Senate floor the week of October 16.

    Once both chambers produce a budget resolution, they must then negotiate and approve a compromise version before Congress can begin working on tax legislation.

    In September, President Trump and House and Senate Leaders unveiled a framework for comprehensive tax reform titled “Unified Framework for Fixing Our Broken Tax Code,” which targets key county priorities as “offsets” for lowering individual and corporate tax rates. The plan would eliminate the state and local tax (SALT) deduction, which includes the deductibility of local property taxes, and does not mention the tax-exempt status of municipal bonds.

    Despite releasing the new plan, lawmakers insist the budget process must be completed before moving forward on tax reform. House Ways and Means Chairman Kevin Brady said in a press release on September 25 that a comprehensive tax reform plan would not be unveiled until “after the budget is completed by the House and the Senate.”

    For more information or questions, please reach out to Jack Peterson, NACo Associate Legislative Director, at jpeterson@naco.org or 202-661-8805.

    • Congress sets sights on tax reform, marking county priorities as potential offsets
    • A new coalition website for Americans Against Double Taxation, formed to preserve the SALT deduction
    • A report from the Government Finance Officers Association, which details SALT deduction figures by congressional district in the appendix
    • County-by-county and state-by-state SALT deduction profiles from NACo's County Explorer
    • A core messaging document on the SALT issue
    • A Myths-vs.-Facts sheet to help dispel rumors and talking points about the SALT deduction
    • State profiles of the impact of eliminating the tax-exempt status of municipal bonds
    • NACo's municipal bonds toolkit, with sample op-eds, talking points, and more
    On October 5, the U.S.
    2017-10-03
    Blog
    2017-10-16

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