There is a 70 percent chance that Congress sends a tax reform bill to the president’s desk by the end of August, Kenneth Kies said.
If they don’t, then tax reform probably won’t happen, added Kies, managing director of the Federal Policy Group, a Washington, D.C. consulting firm.
“If it doesn’t get done by the August recess then the probability of it happening will start to decline because when the House members, particularly the House Republicans, come back in the fall, they will be focused on the 2018 elections and their willingness to cast tough votes will dissipate,” Kies said.
Kies, who served as the chief of staff of the Congressional Joint Committee on Taxation from 1995-98, is speaking today at the Insured Retirement Institute’s 2017 Marketing Conference in Chicago.
Republicans have long sought tax reform, but the goal continues to be elusive. Once President Donald J. Trump won in a surprise upset, however, it became a reality.
House Speaker Paul Ryan, R-Wis., and Trump campaigned on similar tax-cut plans. Both would slash the top income tax rate from 39.6 percent to 33 percent.
Both would reduce taxes on corporations, in largely similar ways.
Despite their differences, Ryan and Trump seem to be in harmony on tax reform.
Trump’s plan “clearly moved in the direction of the House Republican blueprint and that wasn’t accidental,” Kies said. “It doesn’t hurt that (White House Chief of Staff) Reince Priebus is very close to Ryan. That makes for a pretty good situation in terms of coordination.”
The insurance industry wants to watch out for any resemblance to a tax reform draft issued in 2014 by former House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich., Kies said.
The “Camp draft” proposed levying as much as $583 billion in taxes and fees over the next 10 years from 50 proposals that have an impact on the insurance industry, a NAIFA legislative expert said at the time.
Estate tax repeal is one idea both Ryan and Trump support.
“It’s potentially tricky because this administration has some very wealthy people,” Kies said of the estate tax repeal. “Right now, you’d have to say it looks likely but then you have to ask yourself the question in order to get the 51 votes in Senate is that going to be possible?”
In order to get tax reform done by the key August deadline, the White House and Congress must move quickly on health care, Kies said, probably by April 7. Lawmakers are expected to leave Washington, D.C. on that date for a two-week recess.
“If their effort to repeal and replace Obamacare were to stumble it would have a very negative effect on the prospects for getting tax reform done,” Kies said.
As evidence for the likelihood of tax reform success, Kies points to the long record of significant accomplishments by new presidents. Bill Clinton shepherded a historic budget deal through Congress shortly after taking office, while George W. Bush did the same with a $1.3 trillion tax-cut plan.
Barack Obama moved a $750 billion stimulus plan during his early days of 2009.
“First term presidents have a window of opportunity to do big things in their first year in office, but it doesn’t stay with them forever,” Kies said. “If you look at past history, this (tax reform) timeline isn’t out of whack at all.”
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
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