Tax Policy Update - November 10, 2014

NUMBER OF THE WEEK: 201

The number of times Sen. Orrin Hatch (R-UT), the presumed chairman-in-waiting of the Senate Finance Committee, has called for tax reform in press releases on the Ranking Member page of the Senate Finance Committee's website.

In this week's Tax Policy Update.... the election's impacts on tax policy, extenders in the lame-duck, FIRPTA fix lurking, EU "state aid" tax investigations expected to soar, SCOTUS to hear Obamacare tax subsidy challenge.

LEGISLATIVE LANDSCAPE

Election Recap. Last Tuesday's midterm election results signaled major changes coming to Capitol Hill in 2015. For the first time in eight years, Republicans have won control over both houses of Congress, picking up at least seven seats in the Senate, for a 52-seat majority, with results outstanding in Alaska and Louisiana, where incumbent Senator Mary Landrieu (D) will face a runoff election against Republican challenger Bill Cassidy on Dec. 6.

House Republicans bolstered their majority by as many as 14 seats, although several election results are not yet finalized.

Impacts for Tax Policy. With majorities in both houses of Congress, Republicans have a mandate to show they can govern, and tax policy — or more specifically, tax reform — is a key area that needs more than lip service after years of claiming it as a Republican Party priority.

Although Republicans won't have the 60 votes needed to prevent a Democratic filibuster, they can still get laws passed if they can recruit between six and eight Democrats to join them (depending on the final outcome of the outstanding elections in Alaska and Louisiana). As a result, moderate Democrats will be very important players in this new dynamic. Think Senators Mark Warner (D-VA), Bill Nelson (D-FL), Tom Carper (D-DE) and Michael Bennett (CO), among others.

Come 2015, Sen. Orrin Hatch (R-UT) will assume the chairmanship of the Senate Finance Committee, and Paul Ryan (R-WI) is widely expected to chair the House Ways & Means Committee. Both men have long been vocal proponents of tax reform (See: "Number of the Week" above), and Ryan recently told reporters on the campaign trail that he intends to work with the Senate Finance Committee to put out a new tax reform draft sometime in 2015.

But a draft doesn't mean tax reform will happen. Republicans will have nine months to a year at most before attention on the 2016 presidential and congressional elections will supplant any momentum for politically sensitive...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT