Doug Sword

House Democrats to move on temporary ‘SALT’ cap increase
Ways and Means panel could take up legislation as early as next week, Pascrell says

The House Ways and Means Committee could take up legislation as early as next week that would increase a limit on state and local tax deductions that has riled Democrats from high-cost regions, according to a senior panel member.

The “SALT” bill, which has not yet been released, is still in flux, but the $10,000 deduction limit set by the Republican-backed tax code overhaul would be raised to an as-yet undetermined level for three years, according to Rep. Bill Pascrell Jr.. A final figure hasn’t been decided on, the New Jersey Democrat said, describing it as “maybe $15,000 or $20,000, whatever that figure’s going to be.”

Disputed butane tax credit could cost nearly $50 billion
Estimate from Joint Committee on Taxation could give stalled tax extenders talks new urgency

The Treasury now stands to take a $49.9 billion hit if oil refiners prevail in their claims that gasoline mixed with butane qualifies as an alternative fuel eligible for a 50 cents per gallon federal tax credit.

The new estimate was revealed in a letter sent Wednesday from Thomas Barthold, chief of staff to the Joint Committee on Taxation, to attorneys for the House Ways and Means and Senate Finance committees.

House Democrats feeling the heat on ‘SALT’ cap rollback
Democrats still haven’t touched the cap on state and local tax deductions

It’s been almost a year since Democrats assumed control of the House, and they still haven’t touched the cap on state and local tax deductions imposed by the GOP Congress and President Donald Trump that disproportionately affect blue state districts.

That’s starting to become a problem for the dozen or so freshman Democrats who flipped GOP seats after campaigning in part on getting rid of that $10,000 “SALT” limit, which was included as an offset for the 2017 tax code overhaul.

Democrats prepare to duel McConnell over year-end wish list
Amid push for legislation benefiting Kentucky constituents, Dems seek their own concessions

As former Sen. Wendell Ford often said, with small variations: “Kentucky is beautiful women, fast horses, bourbon whiskey, cigarettes and coal. I represent Kentucky, and that’s what I represent.”

The colorful Ford, a Democrat who died in 2015, had little else in common with Mitch McConnell, the stoic Kentucky Republican who served as the junior senator from the Bluegrass State alongside Ford for 15 years until the latter’s 1999 retirement. But the Senate majority leader is clearly taking a few pages from Ford’s playbook in the year-end legislative scramble as he heads into a potentially difficult reelection campaign in 2020.

Top Republicans say costs a hurdle to bipartisan tax deal
GOP leaders say House Democrats want too much in return for movement on a bill to renew tax breaks known as extenders

Republican leaders say House Democrats are asking for too much in return for movement on a bill to renew 30-plus tax breaks known collectively as extenders.

Senate Finance Chairman Charles E. Grassley said his office estimates one version of the House Democrats’ request at $710 billion for a package that would make both the tax extenders and a proposal by House Ways and Means Chairman Richard E. Neal, D-Mass., permanent.

Senate rejects repeal of state and local tax deduction cap rule
43-52 vote was mostly along party lines

The Senate rejected an attempt to repeal a Treasury Department rule that thwarts workarounds employed by several states to bypass the $10,000 limitation on state and local taxes that was a key feature of the 2017 tax code overhaul.

The 43-52 vote Wednesday was mostly along party lines, though Kentucky Republican Rand Paul crossed the aisle to vote for the Democrats’ measure, while Colorado’s Michael Bennet, a 2020 Democratic presidential contender, voted against it.

Democrats seeking votes in Trump country tout miners’ benefits
As Republicans prepare a coal pension fix proposal, Democrats push for more

Senate Republicans say they’re close to unveiling a plan to address a $66 billion funding shortfall affecting coal miners’ and other union pension plans, an issue Democrats see as advantageous politically and as a possible bargaining chip in trade talks with the Trump administration.

President Donald Trump championed manufacturing and coal industry jobs during his 2016 campaign, including in critical swing states he won like Pennsylvania and Ohio. In the 2020 campaign, Democrats have been touting “broken promises” to workers in those states and others, including more traditional GOP bastions like Kentucky where Senate Majority Leader Mitch McConnell is up for reelection next year. 

Local newspapers wait anxiously for pension funding relief
Crucial retirement savings package appears stuck in the Senate

Local newspapers serving communities from Tampa, Florida, to Walla Walla, Washington, say they’re under the gun from a pension funding “cliff” they face next year that will make them have to rapidly catch up on required contributions, exacerbating their well-documented financial decline.

When relief for some 20 publishers passed the House in May on a 417-3 vote as part of sweeping retirement savings legislation, it seemed like a slam dunk that lawmakers would ride to the rescue in time.

Trump gets temporary stay after judge rules for DA in tax records case
Judge had ruled earlier Monday against Trump’s efforts to block Manhattan DA’s subpoena for his taxes and other financial info

President Donald Trump won a temporary stay of an earlier court ruling Monday to compel release of his tax returns to Manhattan District Attorney Cyrus Vance.

The U.S. Court of Appeals for the Second Circuit in New York granted the motion due to “the unique issues raised by this appeal,” which had been filed by Trump’s lawyers in the morning seeking an answer by 1 p.m.

State and local tax cap rollback included in year-end tax talks
Democrats leading SALT discussions say they hope to have legislation ready for markup in October

A senior House Ways and Means Democrat said Wednesday that a full, though temporary, elimination of the current $10,000 cap on annual state and local tax deductions is among the proposals being discussed for a possible markup in the coming weeks.

Committee Democrats also discussed in a Wednesday caucus meeting how a “SALT” rollback and a raft of other tax legislation the committee has advanced or will soon consider might fit into a deal later this year with Senate Republicans, and what offsets might be offered as part of any package, said Rep. Bill Pascrell Jr., D-New Jersey.

Ways and Means to weigh rollback of state, local tax deduction cap
SALT cap in 2017 overhaul law hit taxpayers in high-tax states especially hard

Democrats on the House Ways and Means Committee will soon hold “at least a full-throttle discussion” about their concerns with the $10,000 cap on state and local income tax deductions that was part of the 2017 tax code overhaul, though it is uncertain whether that will lead to legislation that would increase or even repeal the limit.

Ways and Means Chairman Richard E. Neal of Massachusetts told reporters Tuesday that the Select Revenue Measures Subcommittee would be taking up the issue “pretty quick.”

Ways and Means chairman cites ‘credible allegations’ of misconduct in presidential tax audit
Allegation cited in filing in battle between House Democrats and Treasury over access to returns

The House Ways and Means Committee said it had received “credible allegations” from a federal employee of potentially “inappropriate efforts to influence” the IRS’ mandatory audit of presidential tax returns.

References to the unexplained allegations were in a letter included in a Tuesday filing by the committee in its federal lawsuit against Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig. The filing consisted of arguments in support of the committee’s motion for the court to grant it summary judgment in its lawsuit seeking six years of tax returns from President Trump and from eight of his businesses.

Trying to conceal tax returns, Trump sees political coordination in subpoenas
President accuses New York officials of working with House Democrats to damage him

President Donald Trump says New York Attorney General Letitia James is “closely coordinating with House Democrats in a joint effort to obtain and expose” the president’s tax returns and financial information.

The allegation came in a filing Monday in federal district court in Washington as Trump amended the July 23 lawsuit he brought to block James and Michael R. Schmidt, commissioner of New York state’s Department of Taxation and Finance, from providing the president’s state tax returns to the House Ways and Means Committee.

Senate Democrats push repeal of state and local tax rule
The $10,000 state tax deduction limit was a key feature of the 2017 tax code overhaul

Senate Democrats will push to repeal a Treasury Department and IRS rule, which goes into effect Aug. 11, that they say would “block critical state workarounds” to the $10,000 limitation on state and local tax deductions.

The $10,000 deduction limit was a key feature of the 2017 tax code overhaul, and has been the subject of hearings in the House Ways and Means Committee where Democratic members are urging a repeal of that provision.

Eyeing Trump taxes, House panel releases Nixon documents
Kevin Brady, top Ways and Means Republican, calls move “a travesty”

The House Ways and Means Committee on Thursday released documents relating to a Dec. 13, 1973, request by the Joint Committee on Taxation for President Richard Nixon’s tax returns that show five years of returns were provided the same day by the IRS.

Committee Democrats said the significance of the documents is that Nixon’s tax returns and other private tax information were handed over to what was then called the Joint Committee on Internal Revenue Taxation because of authority under Section 6103 of the tax code. 

What we know so far about the budget, debt limit deal
CQ Budget podcast, Episode 119

Congress is racing to complete work on some big-ticket items before adjourning for the August recess. CQ Roll Call’s budget and appropriations reporter Kellie Mejdrich reports on a deal to extend the debt limit and set spending levels for two years. And finance reporter Doug Sword explains why the House plans to vote on a bill to shore up struggling pension plans.  Meanwhile, the Senate plans to give final approval of a permanent compensation fund for victims of the Sept. 11 terrorist attacks.

Show notes:

McConnell-backed tax treaties sail through Senate, despite Paul
Paul said McConnell ‘sabotaged’ efforts to put privacy protections into treaties with Spain, Japan, Luxembourg and Switzerland

The Senate ratified three tax treaties with Japan, Luxembourg and Switzerland on Wednesday, joining a fourth pact with Spain that won approval a day earlier.

The votes were lopsided as no more than three senators opposed each of the deals, which update rules aimed at reducing taxes on multinational companies operating in both the U.S. and treaty partner nations.

Pricey pension rescue headed to House floor next week
Bill would provide financial lifelines to union pension plans

House Democrats will bring a $64.4 billion measure that would provide financial lifelines to union pension plans to the floor next week.

House Majority Leader Steny H. Hoyer and House Ways and Means Chairman Richard E. Neal, the bill’s author, on Tuesday confirmed the schedule for the legislation, which has gone through the Ways and Means as well as Education and Labor panels.

Grassley: ‘Cadillac’ tax repeal points way to extenders deal
PAYGO rules may no longer be a hindrance, Iowa Republican hints

Senate Finance Chairman Charles E. Grassley sees a “little bit of progress” on the tax extenders front in House Democrats’ decision to push repeal of the “Cadillac tax” on high-cost health insurance plans, without offsets for the lost revenue.

The House’s pay-as-you-go rules have been a hindrance for much of the year on moving legislation to extend tax breaks that expired at the end of 2017 and 2018. The most expensive of those is a provision originally authored by Grassley in 2004 to provide a $1 per gallon biodiesel blenders tax credit, which costs about $3 billion a year.

Oil refiners racing Congress to protect butane loophole
Joint Committee on Taxation now estimates 1-year extension of the alternative fuel credits would cost $7.1 billion

For more than a decade, oil refiners didn’t realize what a moneymaker they had in butane — at least for tax purposes.

They do now.