House Republicans are preparing to hit the campaign trails with another tax-cut package in tow. Ways and Means Chairman Kevin Brady (R-TX) is hoping to provide a public preview of Tax Cuts 2.0 in August; this should give lawmakers enough time to review the package of tax proposals before a floor vote in the fall.
Those who have been tracking Tax Cuts 2.0 already know that the centerpiece of the legislation will focus on making permanent the individual and select business tax cuts enacted in 2017. In addition to permanency, the tax package is also expected to include provisions addressing retirement savings and education benefits. McGuireWoods’ Tax Policy Update team has heard that lawmakers are interested in consolidating some of the education tax benefits. And according to a Ways and Means staffer, the retirement provisions under consideration do not include “Rothification,” whereby the pre-tax benefits of certain retirement plans would be limited or eliminated.
For fans of tax extenders, Tax Cuts 2.0 will likely disappoint, as some lawmakers have already indicated that they would not be included. Although President Trump would like to use the forthcoming tax package to cut the corporate tax rate further down to 20 percent from the current 21 percent, the inclusion of such a proposal is highly improbable – it just wouldn’t make a good sound bite ahead of the midterms.