House Ways & Means Committee OKs a key component of Tax Cuts 2.0. The panel approved the Protecting Family and Small Business Tax Cuts Act of 2018 yesterday by a vote of 21 to 15. It would make the Tax Cuts and Jobs Act’s individual tax cuts permanent. TPC estimates that the bill would reduce federal revenue by $631 billion from 2026-2028 and an additional $3.15 trillion in the decade after that. The bill faces opposition from all Democrats and some Republicans in the House and will not get the 60 votes it needs to pass the Senate, at least not this year.
Treasury puts out some GILTI regs. Treasury has released initial guidance on the TCJA’s tax on global intangible low-taxed income (GILTI) generated by controlled foreign corporations. These regs mostly govern calculation of the tax.
Shutdown—No worries? Congress has agreed to a $147 billion spending package. The continuing resolution will keep most government agencies funded through December 7—past the election. President Trump still periodically threatens to shut down the government unless his border wall is funded, which this bill does not do.
Viard of AEI: Accelerate, don’t delay, the “Cadillac tax.” Writing in his column for The Hill, Alan Viard of the American Enterprise Institute argues that the Affordable Care Act’s tax on high cost health insurance plans “helps correct a major flaw of the tax system: the unlimited tax break for employer-provided health insurance.” Workers do not pay taxes on their health benefits which creates an incentive for employers to provide more worker compensation through health insurance, rather than wages.
OMB is reviewing Treasury’s Opportunity Zone regulations. TaxNotesreports that the Office of Management and Budget is reviewing proposed regulations on investments in opportunity zones. Lawmakers created the zones in TCJA to prompt investment in financially-strapped communities. OMB has 10 days to review the guidance.
Speaking of OMB review, join next week’s TPC event on the Costs and Benefits of Tax Regulations.Treasury must prepare a cost-benefit analysis of any regulation projected to have an annual non-revenue effect on the economy of $100 million or more. A panel will discuss how Treasury should do these studies and the implications of its choices. The event takes place next Thursday, September 20, from 12:30 pm to 2:30 pm. You can watch the live webcast here or register to attend in person here.
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