The July 17 edition of the Tax Policy Update is up! Read it here.
The July 17 edition of the Tax Policy Update is up! Read it here.
That was fast — last week McGuireWoods’ Tax Policy Update reported that House Financial Services Chairman Jeb Hensarling (R-TX) would be putting together a legislative package as a follow-up to the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), the bipartisan regulatory relief bill for small financial institutions enacted in May 2018.
The short wait is over: The House is set to take up the JOBS and Investor Confidence Act (S. 488) this week. Hensarling’s legislation is a compilation of 32 standalone bills with strong bipartisan support. There are measures aimed at improving access to capital; providing relief from Dodd-Frank’s requirements for living wills and stress tests; and simplifying certain disclosure requirements, among other things. A quick summary of all 32 measures in S. 488 is available here.
The “listening sessions” for Tax Cuts 2.0 have begun. Ways and Means Republicans gathered last week to discuss which tax provisions should go into the forthcoming legislative package. Ways and Means Chairman Kevin Brady is pushing hard to release a proposal by July 26 before the House leaves for the August recess — an ambitious timeline given that no major decisions were made at the July 11 meeting.
The tax-writing panel is reportedly considering a provision that would index capital gains to inflation. Additionally, Rep. Carlos Curbelo (R-FL) told reporters that Tax Cuts 2.0 would not address international items like the global intangible low-tax income (GILTI) or the base erosion anti-abuse tax (BEAT). These two international provisions might be addressed in the technical corrections bill that Chairman Brady is planning to introduce after the midterm elections. GOP tax writers are waiting to see what the Treasury will do first via guidances and whether the regulatory fixes will be sufficient.
The House and Senate convene today at noon and 3 p.m., respectively.
FY 2019 Appropriations. The chamber is gearing up to tackle its second “minibus” spending package for fiscal year 2019. The House Rules Committee is meeting at 5 p.m. today to draft a rule for floor consideration of R. 6147, which contains the spending bills for Financial Services and Interior-Environment. The funding measure would, among other things, provide $11.6 billion for the IRS and $1.66 billion for the SEC. H.R. 6147 could hit the floor as early as Tuesday, July 17.
S. 480. The JOBS and Investor Confidence Act contains a number of provisions aimed at improving access to capital; providing relief from Dodd-Frank’s requirements on living wills and stress tests; and expanding investment for small businesses.
Carbon Tax. Lawmakers will vote on a resolution that expresses the sense of Congress that a carbon tax would be detrimental to the U.S. economy.
Powell Talks Economy. Federal Reserve Chairman Jerome Powell is scheduled to appear before the House Financial Services Committee on Wednesday to deliver his monetary policy report and an update on the state of the economy.
Trade Hearing. The House Ways and Means Committee has a hearing on Wednesday to examine the impact of tariffs on U.S. agricultural and rural communities.
Vote. The chamber will vote today on the nomination of Scott Stump to be the assistant secretary for career, technical, and adult education at the Department of Education.
FAA Bill. Republicans are looking to circulate an updated version of their FAA reauthorization bill this week. The plan is to identify and eliminate any problematic provisions that might cause a delay before the bill is taken up for consideration.
Kraninger in the Hot Seat. Kathy Kraninger, nominee to be the CFPB director, will come before the Senate Banking Committee on July 19 for her confirmation hearing. Democrats on the panel are expected to grill the nominee on her lack of experience in consumer financial regulation.
Key Hearings and Meetings
The recent enactment of the Bipartisan Budget Act of 2018 extended and significantly expanded the existing tax credit for carbon sequestration under Section 45Q of the Internal Revenue Code. Although the Section 45Q credit for carbon sequestration has been available since 2008, the limitations and uncertainty associated with the credit greatly limited its effectiveness in spurring investment in eligible carbon capture equipment. As amended, the new Section 45Q represents a serious attempt by Congress to make the credit more attractive by incorporating a number of industry-favorable changes.
Check out McGuireWoods’ legal alert on this issue here.
The July 9 edition of the Tax Policy Update is up! Read it here.
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.
The Senate convenes today at 3 p.m., and the House returns Tuesday at noon.
President Trump is expected to announce his Supreme Court nominee this evening. On the short list are the following appeals court judges: Amy Coney Barrett (7th Circuit); Brett Kavanaugh (District of Columbia); and Raymond Kethledge (6th Circuit).
Here’s what’s in store for the week on Capitol Hill:
Votes. The chamber will take up the following financial services bills:
FY 2019 Appropriations. House appropriators are putting together the next “minibus” spending package for floor action the week of July 16 – it is expected to include the Financial Services bill and the Interior-Environment bill.
Mnuchin Speaks. The House Financial Services Committee welcomes Treasury Secretary Steve Mnuchin on Thursday to receive his update on the international financial system.
Nomination. The chamber will consider the nomination of Mark Jeremy Bennett to be a U.S. circuit judge (9th Circuit).
Paid Family Leave. The Senate Finance Committee will hold a hearing on Wednesday to examine the importance of paid family leave for working Americans.
Fair Credit Reporting Act. The Senate Banking Committee will hold a hearing Thursday to provide an overview of the U.S. credit bureaus.
On June 28, the Senate Banking Committee held a hearing to examine various legislative proposals aimed at improving corporate governance. A copy of McGuireWoods’ congressional hearing report is available here if you’re interested in reading some of the highlights.
Many thanks to our summer intern Rebecca Harbison for covering the hearing.
On June 28, the Senate Finance Committee held a confirmation hearing for Charles Rettig, nominee to be the next commissioner of the IRS.
A copy of McGuireWoods’ congressional hearing report is available here if you’re interested in reading some of the highlights. Many thanks to our summer intern Derek Wu for covering the hearing.