Lawmakers Consider Tax Provisions in Debt Ceiling and Government Funding Debates
With both the debt ceiling and government funding deadlines coming quickly, House Republicans and some House Democrats have joined together to attach a repeal of the 2.3 percent medical device tax to the government funding legislation. (Separately, and almost on a party-line vote, the House passed an amendment that would delay the implementation of the Affordable Care Act for one year).
President Barack Obama opposes such measures and has threatened to veto the continuing resolution should the medical device tax repeal and one year health care delay be included in the final legislation. Action now moves to the Senate, where Senate Majority Leader Harry Reid (D-NV) will move to strip the legislation of the House amendments.
Republicans are considering attaching a fast-track tax reform process styled after a similar measure passed in the House in August 2012 to the debt ceiling legislation. Democrats have, so far, baulked at adding this provision to either the debt ceiling or government funding measure.
Repeal of the medical device tax had previously received bipartisan support in the Senate, passing on a 79-20 non-binding vote in March, albeit with Democratic members stating that a pay-for was necessary in order for them to support passing it into law.
Ways and Means Expected to Release Tax Reform Proposal
Earlier in September, House Ways and Means Committee Republicans began a series of focused meetings to advance the release of a tax reform bill for consideration by the committee this fall.
While Committee Chairman Dave Camp (R-MI) has suggested that additional drafting remains to be completed before release of a bill, the committee staff is believed to have penned considerably more than the previously-released discussion drafts on international corporate taxation, financial products, and passthrough entities.
When it is released, we expect the bill to substantially reduce corporate income tax rates, reduce individual tax rates, and adopt a move toward a territorial tax system.
To accomplish those goals, the reform measure would need to propose eliminating a variety of tax credits and preferences and make other changes in current tax law.