The First Lap of Tax Reform is Completed and the GOP is Ahead by a Nose
On Thursday, the U.S. House of Representatives agreed to the Senate version of the FY 2018 Budget Resolution, 216 to 212, with 20 Republicans from high tax states joining Democrats as no votes. It being a congressional resolution, binding only on Congress, and not a public law, it will not require a signature from the President.
As the Chairman of the Ways and Means Committee, Kevin Brady, announced that he will move forward with his “mark” or version of tax reform next week, the Republican defections on the budget resolution show how narrow his pathway forward is for passage. The 20 GOP no-votes were about one tax deduction, state and local taxes. To stay within the allowed $1.5 trillion deficit increase allowed by the budget resolution, Chairman Brady will need every revenue raiser he can muster. It will only take, however, a few additional members of his party to walk across the aisle because of the loss of a popular tax incentive to stop the tax bill in its tracks.
On the Senate side, Majority Leader Mitch McConnell can only lose three votes for the bill to fail. Between the moderates and the recent rebel Republican senators, it is highly likely that the bill will not pass without moderate Democratic votes to make up the difference. Look for Trump to start a full out press of Senators from Trump-states like North Dakota, West Virginia and Indiana. The question is, will it be the Art-of-the-Deal Donald Trump or the nickname tweeting Donald Trump?
Tax reform is going to and will continue to be a “hot” topic. Please do not get caught with poor planning. Call us at 201-266-0025 to book your complimentary consultation.