Speaker Boehner had a three step plan at the beginning of October: 1) Resign at the end of the month; 2) Clear the legislative decks of controversial and difficult items; 3) Turn the gavel over to a new Speaker to begin their tenure with a clean slate.
Looking back, he pretty much pulled it off. Sure, the Speakership went to Paul Ryan, not Kevin McCarthy, and not all the tough legislative items cleared Congress, but the simple fact is that Speaker Ryan begins his term with a much more manageable set of issues than the laundry list of must pass items that confronted Boehner at the beginning of October:
- Federal Funding
- Debt Limit
- Highway Funding
- Tax Extenders
- Medicare Premium Hike
- Social Security Disability Fund
Of these, the deal brokered by Boehner, McConnell and the White House takes care of the debt limit, the looming Medicare premium hikes, and the depletion of the Social Security Disability Fund. It also raises spending caps for discretionary funding next year by $50 billion, making the job of passing all those spending bills – most likely in the form of a single, massive omnibus spending bill – before the December 11th deadline much, much easier.
Which means between now and the end of the year, the remaining must pass items are largely limited to three – 2016 spending bills, highway reauthorization, and tax extenders. The House highway bill is up this week, and appropriators are busy working to have appropriation bills ready for consideration later this month. Other items, like Ex-Im Bank reauthorization, may likely catch a ride on one of these vehicles.
Which leaves extenders. Once again, Congress has waited until the last days to adopt extensions of tax provisions that have already expired.
That to-do item will fall on the plate of the incoming Ways & Means Committee Chairman. The election to replace Ryan will take place on Wednesday and Politico has a terrific story this AM on the race. Here’s the key paragraph:
With just days left, lots of people think that the race between Kevin Brady of Texas and Pat Tiberi of Ohio to replace Ryan as Ways and Means chairman remains too close to call. Both Brady and Tiberi are well-liked by colleagues, and have pretty similar policy views on the issues under Ways and Means’ jurisdiction. That means this contest could be decided on issues more on the margins, like fundraising prowess and even sheer geography.
For S corporations, both candidates are terrific and have a long history of supporting independent businesses and their communities. Let’s hope whoever wins, their first action item is to markup a tax extender package that makes as many provisions permanent as possible. A little tax certainty would go a long way at a time when the economy looks iffy at best, and it would be a terrific start to a new era at the tax writing committee.
Rubio on Pass Thrus
Senator Marco Rubio did a post-debate interview with CNBC last week where he made a vigorous defense of his tax proposal, as well as the importance of S corporations and other pass through businesses to the economy and jobs:
“…I think we also need to lower taxes on pass-throughs, which is where the vast majority of American business activity is happening. You know, I have gentleman–I mentioned him last night–he’s the dry cleaner where I take my clothes in Miami. He’s an S-corp and he’s a small business and he’s probably paying a much higher rate, in fact almost guaranteed he’s paying a higher rate than a chain-owned company down the street somewhere, and that’s unfair. I think we have to make an equal playing field for pass-through companies, where a lot of working Americans are drawing their income, and have been placed at a competitive disadvantage now because of regulations, because they don’t have access to community banking the way they once did, and because of the tax code that actually treats them differently…”
As readers know, we initiated the “Pass Through Principles” letter four years ago in an effort to define what sort of tax reform the pass through business community would support. This year, 120 groups signed the letter, which calls for making tax reform comprehensive, restoring tax rate parity for all businesses, and reducing or eliminating the double corporate tax.
The Rubio tax plan comes very close to meeting those three priorities. It would eliminate the harmful double tax on corporate profits while leveling the tax rates paid by pass through businesses and their C corporation competitors. Senator Rubio’s team spent an enormous amount of time working with the business community to craft their plan, and it shows.