SEE YOU IN 2024, CONT’D: By now, the basic contours of a tax bill, or at least what tax writers have been talking about, has been clear for quite a while — basically a year, even. Republicans have been interested in reversing three tax increases that they put into their 2017 tax law and started going into effect in recent years, resulting in less generous incentives for businesses on research spending, deductions for interest on debt and investments in physical property. Democrats, meanwhile, want to expand the Child Tax Credit, arguing there were incredibly positive returns from their 2021 monthly child payment program. A trade of those potential business tax cuts for a larger child credit could cost around $100 billion in the short-term, split evenly between those priorities, though the long-term revenue losses could be far higher. Smith believes that a variety of potential vehicles could exist next year, according to Camp — which would mean avenues beyond government funding measures needed early in 2024. Plus, the Ways and Means chair also is at least considering whether those business tax cuts would need to be offset with savings elsewhere and sounded open to expanding the child credit. A Ways and Means spokesperson agreed with the broad strokes of Camp’s synopsis of the interview with Smith, according to Tax Notes. PwC hasn’t posted the full interview between the current and former chair, though, and the spokesperson said he couldn’t recall any talk of offsets. So the question remains: How optimistic should one be about a tax bill getting done in the next couple months? In a lot of ways, Camp's outline lays out the bullish case for why a tax bill is possible in the near future. Still, even some of the skeptics out there now believe there is at least a window for getting this long-discussed tax measure across the finish line, even if they also believe a lot will have to go right for that to happen. Leading tax writers have been keeping congressional leadership informed about the progress they’re making in discussions, and you’ve now got about three-quarters of House Republicans on the record as being interested in a tax bill. Meanwhile, the case against a tax bill has been pretty succinct for quite a while now — essentially, why should you expect this Congress to achieve something like that? In other words, it’s not clear that a leadership that’s kept in the loop on tax talks will give their backing to a final product. And, of course, all eyes will be on Speaker Mike Johnson if a deal does look like it’s close at hand, given some House Republicans are already protesting his handling of spending measures and other legislation. Also on your radar: Smith, also via Camp, is already starting to prepare for the bigger tax negotiations to come before the end of 2025, when the individual provisions from the Tax Cuts and Jobs Act expire. The big unknown hanging over those talks? The 2024 elections. Smith will be the top House GOP tax writer in two years, unless something very unexpected happens — but whether he’ll hold the gavel depends on whether Republicans keep the House. And which party holds the most leverage in those talks depends on who wins both the White House and the Senate next year as well. FIRST LOOK: Sen. Catherine Cortez Masto (D-Nev.) is bringing back a bill that would ease the tax bill for litigants who make successful claims against corporations in court. Under current law, plaintiffs who win their cases get taxed on the full sum they’re awarded by a court — both for damages and legal fees. That means that in some cases, according to Cortez Masto, a litigant can end up losing money in the end — because the taxes on both lawyer fees and the damages can exceed whatever they might bring home in damages. To combat that, Cortez Masto’s bill would exempt those attorney fees from taxation. The Nevada Democrat introduced the measure in the last Congress, with 18 fellow Democrats signing on to the bill. A House version, introduced by Rep. Steven Horsford (D-Nev.), had 60 Democratic co-sponsors during the previous Congress.
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