News from the Hill: Tax Reform
Last week Community Foundation donors had the opportunity to hear from Dawn Levy O’Donnell, our voice on Capitol Hill. Dawn has served as our lobbyist for nearly 10 years, working to ensure that the tax laws continue to support the incredibly important role donors play in our country.
At this moment, Dawn is keeping a very close eye on tax reform, given that all deductions have the potential to be reduced or eliminated. While at this point it appears unlikely that the charitable deduction will be eliminated, we’ve learned that we need to maintain a constant dialogue with legislators and their staffs. They must understand how donors have leveraged the charitable deduction to do what the government cannot.
Dawn is quick to say that what’s true in D.C. today may not be true tomorrow, but here are her thoughts on potential tax reform as of right now:
What are the chances of some kind of tax reform or relief passing? Two questions: if and when.
The “big six” (House Speaker Paul Ryan, House Ways and Means Committee Chairman Kevin Brady, Senate Majority Leader Mitch McConnell, Senate Finance Committee Chairman Orrin Hatch, Treasury Secretary Steve Mnuchin, and White House National Economic Council Director Gary Cohn) have been meeting since March to come up with broad areas they can reach agreement on – tax cuts as low as possible for as many as possible, and as much permanence of these provisions as possible. Not an easy task no matter how you slice it, but there is a specific expedited procedural process they can use to pass the Senate with only 51 votes, known as reconciliation. Because it is an expedited process, there are very strict boundaries to prevent someone from quietly and quickly attaching an unrelated, revenue-neutral provision.
The process is firmly now with the tax-writing committees – with NEC and Treasury tax staff in constant touch – hammering out details that will transform the broad Republican framework into specific legislative provisions. The 51 votes are not a slam dunk, even with a Republican majority and Vice President Mike Pence as a tiebreaker.
If the GOP can garner enough votes in the Senate, Ryan will have his toughest test yet of herding cats to get it done in the House. If it’s even somewhat within President Donald Trump’s goals, he will likely sign it. So can they get the votes? I think the answer is yes.
However, given a very full legislative agenda, “when” is the big question.
Tax staff, while trying as hard as possible to get something done by end of December to score a win, are saying that practically speaking, anything they can do prior to the 2018 election is a win for Republicans. Tax writers of both houses and the administration are smart, creative people. With enough time and tweaks and acrobatics to stay within certain rules, they can do it.
Authored by: Leanne Breiby, Director of Communications