TenCount -> Tax Code, Taxpayers, and keeping the government open

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TenCount -> Tax Code, Taxpayers, and keeping the government open

A highly selective view of events in the week ahead with important financial, legislative and political implications, put together by your friends at Sphere Consulting.

  • Good morning! It’s tax time! The Senate and the House of Representatives will vote this week on an overhaul of the tax code, sending to President Trump’s desk the first big legislative win of his administration. Expect the White House to pull out all the stops in arranging a signing ceremony, probably by the end of the week.
  • The big feature of the tax overhaul is a cut in the corporate tax rate, from 35 percent to 21 percent. That is a permanent decrease, while the cuts aimed at individual taxpayers are set to expire after 2025. According to The Washington Post, that means that the corporate tax cut is essentially being paid for with a stealth tax increase on individuals. It does so by using slower inflation indexing, which essentially means that middle- and low-income taxpayers are likely to move to a higher tax bracket faster.
  • True, there are benefits for individual taxpayers in the package as well. The top tax rate falls to 37 percent from 39.6 percent, and, thanks to some brinksmanship by Senator Marco Rubio, the bill expands the child tax credit in a way that would effectively excuse millions of low-income people from paying federal income taxes. And it could be easier for millions to file, with an expanded standard deduction meaning fewer people will itemize deductions.
  • One thing that did end up in the tax bill: a tax break for people with large commercial real estate holdings. Hmm … who could that benefit? Senator Bob Corker, who like President Trump has significant commercial real estate, wants to know whence it came. Following suggestions that it was a kickback to win his vote, Corker wrote a letter to Finance Committee Chairman Orrin Hatch asking for “an explanation of the evolution of this provision and how it made it into the final conference report.”
  • Once Congress finishes with the tax bill, it must immediately turn its attention to keeping the government open. Current funding expires on Friday, giving legislators just a couple of days to enact a stopgap spending bill or – we can dream, can’t we? – a budget for the remainder of the fiscal year. That is unlikely, however, given that Republicans need the cooperation of Democrats to pass a budget package. Expect another short-term measure that funds government operations until sometime in January, with another shutdown scenario to follow.
  • Education Secretary Betsy DeVos returns to Capitol Hill on Wednesday for an oversight hearing before the House Committee on Education and the Workforce. Known for her vigorous promotion of charter schools and voucher programs, which give parents alternatives to low-performing public schools, DeVos is likely to be asked about the decision rolling back Obama-era guidelines on how colleges should address campus sexual-assault allegations.
  • President Trump’s lawyers are expected to meet with special counsel Robert Mueller and his team this week to determine what the next steps are in the counsel’s probe of Russian interference in the 2016 presidential election, CNN reportsOn Sunday, the talk shows were full of speculation over whether the president would try to fire Mueller. The president himself insisted on Sunday that he didn’t intend to do so.
  • Former Rep. Scott Garrett faced a brutal hearing in November over his nomination to be president of the Export-Import Bank, an institution which, while he was a congressman, he labeled as “crony capitalism” and tried to shut down. On Tuesday, the Senate Banking Committee will vote on whether to recommend the appointment of Garrett, three other members of the bank’s board and several senior officials to posts at the bank.
  • One of the Export-Import Bank’s main customers, aircraft manufacturer Boeing, could see a deal to sell dozens of jetliners to Iranian airlines derailed by the Trump Administration, the Wall Street Journal reports. The White House is “advancing a strategy” that could scuttle the sales, which have been in limbo as the Trump Administration has threatened to walk away from an international nuclear deal with Iran.
  • Soon after President Trump signs the tax overhaul, the White House intends to turn its attention to the president’s $1 trillion infrastructure plan, hoping for another big legislative victory in the new year. But any such package would require the cooperation of Democrats, because it would need 60 votes to proceed to the Senate floor. Politico reports that the plan, set for release in January, is expected to call for as much as $200 billion in federal spending over the next decade, with the remaining $800 billion coming from private investment, state or local funding and cuts to other federal programs.

    Founded in 2006, Sphere Consulting is an international public affairs firm providing clients with creative, effective, and timely solutions.  Our work spans the globe and all industry sectors with a focus on the implementation of strategic campaigns to deliver your media and government relations needs.

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