On The Hill

Congress

COVID-19 Stimulus

Throughout this week, there have been ongoing negotiations between the White House and House Speaker Nancy Pelosi (D-CA) on a COVID-19 stimulus bill. On Wednesday (Oct. 14), Treasury Secretary Steve Mnuchin said “at this point, getting something done before the election and executing on that will be difficult.”

House Democrats passed a $2.2 trillion package earlier this month, and the latest White House offer is $1.8 trillion. On Thursday (Oct. 15), President Trump said he authorized Mnuchin to offer more than $1.8 trillion.

On Thursday (Oct. 15), Senate Majority Leader Mitch McConnell (R-KY) said the administration’s offer of $1.8 trillion is “a larger number than what he can sell to his members.”

“That’s where the administration’s willing to go,” McConnell said. “My members think what we laid out, a half a trillion dollars, highly targeted, is the best way to go,” he added.^[1] 

Next week, McConnell plans to bring a $500 billion COVID-19 relief bill to the floor. The legislation would provide additional funds for the Paycheck Protection Program (PPP), schools, and hospitals.^[2] 

Supreme Court

The week, the Senate Judiciary Committee held a series of hearings on the nomination of Judge Amy Coney Barrett to the Supreme Court. The committee will vote to move the nomination out of committee on Oct. 22. McConnell said he has the votes for Barrett’s confirmation and said the full Senate will begin debate on Oct. 23.^[3] 

 

OECD

On Monday (Oct. 12), the Organization for Economic Cooperation and Development (OECD) announced that the Pillar One and Two agreements will be delayed until mid-2021. The Pillar One proposal will address digital taxation and Pillar Two would create a minimum level of corporate taxation worldwide. Originally, an OECD agreement was expected to be finalized at the end of 2020.

Director of the Tax Policy Center at the OECD Pascal Saint-Amans said major political differences still exist, including which companies should be subjected to the new taxation regime and whether the rules should be mandatory. Saint-Amans said OECD talks had been delayed due to the COVID-19 pandemic but said there is willingness between the countries to reach a deal.^[4] 

On Wednesday (Oct. 14), French Finance Minister Bruno Le Maire said France would begin collecting digital taxes starting December 2020. France suspended the collection of a digital tax in January 2020 to allow for an OECD agreement. The U.S. Trade Representative (USTR) has multiple ongoing investigations into several countries’ digital tax plans and proposals.

“With the U.S. it has always been clear,” said Le Maire. “If there was no agreement at the OECD in the autumn, we would levy our national tax,” he added.

The move by France raises the risk of the U.S. imposing tariffs and starting a possible trade war.^[5] 

To view the Pillar One report, click here.

To view the Pillar Two report, click here.

 

AEI Report

On Tuesday (Oct. 13), the American Enterprise Institute (AEI) released an updated analysis of Democratic presidential nominee Joe Biden’s tax proposals. The report found that in 2021, the Biden tax plan would, on average, raise taxes for the top five percent of households and reduce taxes on the bottom 95 percent of households. In 2030, taxes would increase for every household, however, tax increases would primarily impact the top one percent. Biden’s tax proposals would raise federal revenue by $2.8 trillion over the next 10 years with $1.9 trillion coming from businesses and corporations.

To view the full AEI report, click here.

 

TPC Report

On Thursday (Oct. 15), the Tax Policy Center (TPC) also released an updated analysis of Biden’s tax proposals. Over the next decade, the Biden tax plan would raise federal revenues $2.4 trillion. The report assumes that the effective date for the Biden tax provisions would be Jan. 1, 2022, because of the uncertain legislative environment and economic disruptions due to the COVID-19 pandemic. The report found that the Biden tax plan would raise income and payroll taxes on high-income individuals and increase income taxes on corporations. According to the report, about 60 percent of the Biden tax increases would come from businesses.^[6] 

To view the full TPC report, click here. 

 

Updated HEROES Act

On Wednesday (Oct. 14), the Joint Committee on Taxation (JCT) released a score on the updated HEROES Act that was passed by the House on Oct. 1. The JCT found that the tax provisions in the legislation would cost around $308 billion over the next 10 years.

To view the JCT score, click here.

 

House Budget Committee

On Tuesday (Oct. 13), Rep. Bill Johnson (R-OH) announced he will run to be the top Republican on the House Budget Committee. Johnson said he has the support of Rep. Steve Womack (R-AR), who is the current ranking member of the committee, and other “influential House Republicans.”

Representative Jason Smith (R-MO) has not ruled out a bid for the position.^[7] 

 

Ways and Means Hearing

On Tuesday (Oct. 13), the House Ways and Means Subcommittee on Oversight held a hearing entitled “Taxpayer Fairness.” The hearing focused on President Trump’s tax returns and other issues related to the Internal Revenue Service (IRS).

To view a summary of the hearing, click here.

 

References

^[1] Ferris, Sarah, & Forgey, Quint. “Pelosi and Mnuchin keep Covid talks alive even as deal remains elusive.” Politico Pro, 15 Oct. 2020. https://link.edgepilot.com/s/aa60e290/8ZDrUwC6o0SjRNISsD6yVw?u=https://subscriber.politicopro.com/article/2020/10/trump-mnuchin-hasnt-come-home-with-the-bacon-in-stimulus-talks-2009256

^[2] Levine, Marianne, & Everett, Burgess. “McConnell plots out preelection endgame with Barrett, Covid relief.” Politico, 15 Oct. 2020. https://link.edgepilot.com/s/b48b391c/KS9SvkiMeE6foVPPaJRzbg?u=https://www.politico.com/news/2020/10/15/senate-judiciary-committee-sets-vote-to-advance-barretts-nomination-429565

^[3] Min Kim, Seung, Cassata, Donna, & Demirjian, Karoun. “Barrett confirmation hearing day four: ‘We have the votes,’ McConnell says of nomination” Washington Post, 15 Oct. 2020. https://link.edgepilot.com/s/33e10017/pZ8QIpp5JEqFOKNYvwNO-Q?u=https://www.washingtonpost.com/politics/2020/10/15/amy-coney-barrett-confirmation-hearing-live-updates/

^[4] Scott, Mark. “Amid political rancor, global digital tax deal pushed back until mid-202.” Politico Pro 12 Oct. 2020. https://link.edgepilot.com/s/039aced7/rv7-g5VzrEa-MNbquetnIw?u=https://subscriber.politicopro.com/article/2020/10/amid-political-rancor-global-digital-tax-deal-pushed-back-until-mid-2021-2007689

^[5] Smith-Meyer, Bjarke & Braun Elisa. “France reinstates digital tax, courting trade war.” Politico Pro 14 Oct. 2020. https://link.edgepilot.com/s/7419bf58/A1tKtcSiP0Srtga7w_FsmA?u=https://subscriber.politicopro.com/article/2020/10/france-reinstates-digital-tax-courting-trade-war-3984613

^[6] Faler, Brain. “Biden’s proposed tax increases have shrunk, analysis says.” Politico Pro, 15 Oct. 2020. https://link.edgepilot.com/s/2249e687/OCsgb1jwWUGnijfJgIHKCg?u=https://subscriber.politicopro.com/article/2020/10/bidens-proposed-tax-increases-have-shrunk-analysts-says-2009274

^[7] Shutt, Jennifer. “Bill Johnson seeks top GOP slot on House Budget panel.” Roll Call, 13 Oct. 2020. https://link.edgepilot.com/s/8996460e/OuZnGu8xskWmHBHchKv3-A?u=https://www.rollcall.com/2020/10/13/bill-johnson-seeks-top-gop-slot-on-house-budget-panel/