Tax News Update    Email this document    Print this document  

The Senate is expected to consider the US-Chile tax treaty this week, and some Ways and Means Republicans are hopeful the House will consider the three tax bills they approved June 13, collectively the American Families and Jobs Act. Tax Notes reported that House "Republicans, who met the morning of June 15 as a caucus, confirmed that the hope is to bring the bill to the floor the week of June 19, if possible. Otherwise, July becomes the target." Senator Rand Paul (R-KY), who has blocked tax treaties over privacy concerns, voted against the US-Chile treaty in Committee, and his posture going to the floor isn't clear. In 2019, votes on amendments were required to clear the Spain treaty. The Bloomberg Daily Tax Report said June 16, "The resolution could be passed by the end of next week, but a vote could be delayed until the following week if [Sen. Paul] — a longtime tax-treaty foe — seeks to slow the vote and run out the clock on the 30 hours of required debate."

Congress - The Senate will return for business at 3:00 p.m. on Tuesday, June 20. The Finance Committee has scheduled a hearing on "Cattle Supply Chains and Deforestation of the Amazon" for Thursday, June 22 (10 a.m.). The Taiwan Tax Agreement Act (S. 1457) is back on the schedule for a Wednesday, June 21 Foreign Relations business meeting, after consideration was scuttled from a June 8 meeting over privacy concerns from Senator Paul.

On Wednesday, June 21 (10 a.m.), the Senate Budget Committee will hold a hearing, "Dollars and Degrees: Investigating Fossil Fuel Dark Money's Systemic Threats to Climate and the Federal Budget."

The House is also back on Tuesday, with votes postponed until 6:30 p.m. On the suspension calendar are:

• Fiscal Year 2023 Veterans Affairs Major Medical Facility Authorization Act (S. 30)
• Paperwork Burden Reduction Act (H.R. 3797)
• Employer Reporting Improvement Act (H.R. 3801)
• United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act (H.R. 4004)

Other business before the House this week includes:

• CHOICE Arrangement Act (H.R. 3799, Sponsored by Rep. Kevin Hern, R-OK, Committees on Ways and Means and Education and the Workforce), to provide for health reimbursement arrangements integrated with individual health insurance coverage
• Veto message to accompany H.J. Res. 45, Providing for congressional disapproval of the rule submitted by the Department of Education relating to "Waivers and Modifications of Federal Student Loans"
• Middle Class Borrower Protection Act of 2023 (H.R. 3564, Sponsored by Rep. Warren Davidson, R-OH, Financial Services Committee) to cancel recent changes made by the Federal Housing Finance Agency to the up-front loan level pricing adjustments charged by Fannie Mae and Freddie Mac for guarantee of single-family mortgages

On Thursday, June 22 (12 p.m.), the House Budget Committee holds a hearing on "Reigniting American Growth and Prosperity: Incentivizing Economic Excellence Through Tax Policy."

Energy tax — An EY Alert, "IRS issues temporary and proposed regulations on elective payment of advanced manufacturing investment credit," is available here.

An EY Alert, "IRS updates guidance on energy communities for bonus IRC Section 45 and 48 credits," is available here.

Tax — Looking ahead to 2024, Politico reported this morning, "If either party can claim both the White House and Congress in next fall's elections, there's a huge prize for the taking: Unchecked power to reshape taxes for millions of Americans. Much of the GOP's sweeping Trump-era tax breaks are set to expire in 2025, which will almost certainly push Congress to act on their future. So the 2024 campaign will determine whether Republicans can keep the cuts, Democrats can rewrite them — or, if neither party gets a clean sweep, whether a split government prompts a massive fiscal collision."

IRA — The Washington Post cited House Republicans proposing to roll back green energy credits and the pharmaceutical industry fighting prescription drug negotiation provisions in reporting, "A growing roster of corporate and political foes has started to lay siege to the law known as the Inflation Reduction Act, hoping to erode some of its key provisions before they can take effect." The report said, "Some of the legislative efforts face tough political hurdles because Democrats control the Senate and Biden could veto any repeal. But the intensifying opposition underscores the fragility of the president's agenda under a divided government — and the stakes for Biden's signature achievement entering the next election."

Government funding - House GOP appropriators have said they will mark up appropriations bills at FY2022 levels at the urging of the Freedom Caucus, and Speaker Kevin McCarthy (R-CA) is tending to a spending concern rebellion among conservative members in the wake of enactment of the bipartisan debt limit bill. The Senate Appropriations Committee, headed by Democrat Patty Murray (D-WA), is meeting on Thursday, June 22 to set its topline spending levels, which will adhere to the debt limit bill and be higher than the House numbers, and will consider two appropriations bills (Military Construction, Veterans Affairs, and Related Agencies, and Agriculture, Rural Development, Food and Drug Administration, and Related Agencies).

The Wall Street Journal reported that McCarthy "has put Congress on a collision course with a potential government shutdown later this year" with a fight "expected to come to a head this fall when the GOP-controlled House and Democratic-run Senate try to pass an annual spending package." The report said more mainstream Republicans have grown frustrated with the demands of conservatives and, "Behind the scenes, several lawmakers said, McCarthy is trying to educate lawmakers about the spending process to help set expectations for the fall. He also worked to repair rifts, even refereeing shouting matches between moderates and the far-right House Freedom Caucus at a recent GOP conference meeting."

———————————————