Legislative Updates

Legislative Updates

Current Legislative Update

News from the Hill by Council on Foundations, May 11, 2017

So, What's Up with Tax Reform?

Last week, the House inched closer to tackling tax reform after passing a bill to largely repeal and replace the Affordable Care Act (ACA). The bill now sits with the Senate — though it seems unlikely it will pass the upper chamber in its current form given the lack of support among Senate Finance Republicans.

With this matter behind them, the House now turns its full attention to tax reform. Yesterday, Speaker of the House Paul Ryan (R-WI) headed to Ohio to make the case to business leaders for a core component of the House tax plan — the border adjustment tax (BAT).

Much of the Senate Finance Committee is still skeptical of the House plan — notably, the BAT — as indicated by Committee Chairman Orrin Hatch (R-UT) on Tuesday. The Chairman's comments came shortly after Senate tax writing committee members met with White House Chief Economic Advisor Gary Cohn and Treasury Secretary Steven Mnuchin, where it was communicated that the administration remains opposed to the BAT.

The key takeaway from all of this is that although the House has overcome one major obstacle to achieving tax reform (addressing health care legislation), the journey to passing comprehensive tax reform legislation is far from over. The White House has reiterated its intent for tax reform to be a bipartisan process, but even if that turns out to be true, Republicans still face a great deal of pushback from within their own party — with members of the far-right Freedom Caucus already crafting a tax reform plan that they hope to integrate with the existing tax blueprint plan.

Private Foundation Excise Tax Bill Introduced in House

Late last week, Congressman Erik Paulsen (R-MN), with Congressmen Danny Davis (D-IL), Pat Tiberi (R-OH), George Holding (R-NC), and Richard Nolan (D-MN), introduced a bill (H.R. 2386) in the House to simplify the private foundation excise tax to a flat rate of one percent.

Leading into tax reform, this bill is an important signal of priorities to tax writers on the Ways and Means Committee as they draft comprehensive tax legislation. The number and bipartisanship of cosponsors also signals support for the provision.

The Council is actively engaging with Members of Congress to bolster support on this issue, but it's critical that Members hear from you — their constituents. It takes less than five minutes to reach out and urge your Representatives to demonstrate their support for strengthening philanthropy by cosponsoring H.R. 2386.So, What's Up with Tax Reform?




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