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Tax Legislation Emerges as the Most Likely Near-Term Bipartisan Win

Negotiations around immigration reform have stalled, Republicans are seeking to impeach the Secretary of Homeland Security and are starting an impeachment inquiry against the President, neither side of the aisle can agree upon a path forward on assistance to Israel or Ukraine, and a heated election is already in full swing. But, a rare compromise around a new $78 billion tax bill appears to be the most promising legislation that will bring both sides of the aisle together amongst historic levels of partisanship.

The House Ways and Means Committee recently voted 40-3 to advance the Tax Relief for American Families and Workers Act. The bill is likely to reach the House floor this week where an overwhelmingly bipartisan vote is expected.

Unlike most of the legislation passed by the House, the Senate may similarly pass the bill - Senate Finance Committee Chairman Ron Wyden (D-OR) was the Senate lead in the negotiations around the bill’s drafting and is in communication with Republican counterparts to bring on their support.

While there is likely some shock that such a robust tax bill could move through Congress, especially during these particularly partisan times, it makes sense when simply analyzing the legislation and the dynamics around it.

First and foremost, both sides of the aisle significantly benefit from this legislation. Republicans, for example, have long called for extending and expanding some of the key provisions from the 2017 Tax Cuts and Jobs Act. Democrats, on the other hand, have been focused on expanding the Child Tax Credit and the Low Income Housing Tax Credit. Furthermore, both parties will benefit from the bill's restoration of immediate expensing for research and development.

Additionally, the bill was a collaborative effort from early stages of the process. When Republicans introduced a large package last year, it spurred conversation on both sides of the Capitol around what may be possible from a tax perspective The two sides worked together on a bipartisan basis to get a package that reflects priorities of both sides of the aisle.

Of course, the bill will not be without opposition. Some policymakers have already expressed concern around not including increases for the State and Local Tax Credit (SALT), which is an issue that has long divided Congress. Additionally, some Freedom Caucus members have already expressed opposition to business provisions of the tax bill, calling them “corporate handouts.”

Expect this bill to pass the House and likely the Senate with a strong, bipartisan group of supporters…but not without opposition.


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