As Senate Republicans continue to work this morning to try to get a plan to overhaul the nation's tax code back on the rails, the nation waits.
To do what they need to do to get to the vote count goal line, they're going to have to solve for evidence that currently proposed tax cuts will leave the nation awash in an added $1 trillion of budget deficits within a decade. As they do that, they're still on the hook to placate some of their colleagues demands for even steeper tax cuts.
So, there's that.
At this point, the corporate tax cut from 35% to 20% up to now considered to be a sacrosanct Make-America-Great-Again essential of both chambers of Congress' tax reform initiatives--and the President's, may be in play.
Each percentage point north of 20% carries billions of dollars of implications that may negate corporate investment enthusiasm buoying the deliberations, but many policy experts say that anything less than 25% may wind up working as a compromise point for both lawmakers and the President. Right now, a starting point of 20%, stair-stepping up in later years is one of the compromise scenarios.
As the Senate work-session on debate and votes officially starts at 10 a.m. today, the motivations may boil down to two key drivers.
- One, is an opportunity to be a history-maker, responsible for greater changes to how the United States generates and uses revenue than in the past 30-plus years.
- Two, is a fear of a repeat of the Affordable Care Act Repeal fail, an embarrassment that laid bare the powerful fissures that can split even single party alignment in both Houses of Congress and the Executive Branch.
Finally, what's impelling Senate Republicans is this: the number 50.
The number 50 is the prize. It's the win they so want that they can almost taste it.
They've gotten this far, and stand at the brink, divided by what they know, but fearfully aligned in what they feel: which is that failure this time is not an option. Then what?
Wall Street Journal staffers Richard Rubin, Siobhan Hughes, and Kristina Peterson report:
The core of the fast-moving GOP tax bill was a permanent corporate tax cut combined with tax reductions for individuals and pass-through businesses such as partnerships that expire after 2025. The bill would also repeal the mandate for individuals to have health insurance and allow drilling in the Arctic National Wildlife Refuge.
If the bill passes the Senate, Republicans must reconcile it with a version approved earlier this year by the House, likely through a conference committee composed of lawmakers from both chambers.
The House and Senate would each then have to vote again. An alternative would be for the House to vote up or down on the Senate bill, but House leaders have insisted that they won’t do that.
So, it's not over.
Many people whose business and livelihood is housing and home building would like it to be, whatever the outcome. Knowing what the verdict is on the pluses and minuses of the ultimate tax reform bill, and dealing with that is the nature of many of this community's leaders.
Creative destruction can be creatively re-destroyed if it doesn't work out. One way or another, we'll get through it, and the hope is that in this space by year-end, we won't still need to be writing about tax legislation.
Taxes are accounting geography. You pay here, or you pay there. You pay now, or you pay later. A customer for a home is what counts. That will happen whatever the rule makers in Washington decide.
The important thing for builders and related business owners to know and do at this point is 1) continue to work with the National Association of Home Builders to support amendments and fixes to what a final final tax overhaul bill provides for; 2) see that by the end of 2017, you resolve as many tax accounting issues as possible where they could be hit by a Jan. 1 2018 effective date; and 3) also, work with the NAHB on "transition" language that would give businesses and individuals time to migrate and sunset initiatives based on the planned elimination of deduction and credit for major development and construction finance.
Never a dull moment.
