President Biden dropping his bid for re-election and endorsing VP Harris to run in his place, saying "it's time to come together," scrambles the outlook for the presidential race and focuses attention on the Democratic national convention beginning August 19. "The president's decision meant that a nomination will be settled at a convention rather than through primaries," the New York Times observed. VP Harris said she would pursue the nomination, and speculation has begun over who may be chosen as her running mate, from a group of mostly governors and at least one Senator, Mark Kelly (D-AZ). "The president's endorsement is likely to shut down any serious competition from other Democrats to be the nominee, clearing the path for the vice president to be the 2024 Democratic candidate," Politico said.

As a candidate for the 2020 presidential nomination, then-Senator Harris called for repeal of the Tax Cuts & Jobs Act (TCJA). During a June 2019 debate, Senator Harris promoted her LIFT the Middle-Class Act to provide a $500 monthly tax credit for families earning under $100,000 annually and said on "day one" of her presidency, she would "repeal that tax bill that benefits the top 1% and the biggest corporations of America." Senator Harris's campaign tax proposals also included, in the context of a health care proposal, a financial transactions tax at 0.2% for stocks, 0.1% for bonds, .002% for derivatives and taxing "offshore corporate income at the same rate as domestic corporate income."

A July 21 New York Times story said while VP Harris supported Biden administration achievements, including the Inflation Reduction Act (IRA), in prior roles she was perhaps more progressive, "pushing for universal health care" and calling for working class tax cuts to be paid for with tax increases on companies. "Mr. Biden and Ms. Harris did have some differences when vying for the Democratic nomination. Notably, Ms. Harris wanted to raise the corporate tax rate from 21 percent to 35 percent, which is higher than the 28 percent that Mr. Biden had proposed," the story said.

"The centerpiece of those plans was what was essentially a supersized version of the Earned Income Tax Credit, though Harris didn't call it that, which would be layered on top of the existing EITC. It offered couples up to a $6,000 credit that was linked to how much they made, up to certain limits. She proposed making it payable in monthly installments … " Politico said of Harris' 2019 campaign plans. "Harris might also try to revive a long list of tax increases she offered during her campaign, including raising the capital gains tax, a new levy on big banks and a tax on financial transactions."

Congress — Congress returns this week from a week-long recess for the Republican National Convention in Milwaukee, WI and display of party unity that prompted headlines like, in the Wall Street Journal, "Republicans Come Together as Democrats Waver on Biden" in a story that noted that Republicans have an enthusiasm advantage in the election.

The Senate is in pro forma session today, and at 5:30 p.m. on Tuesday, July 23, will proceed to a roll call vote on confirmation of Colleen Duffy Kiko to be a Member of the Federal Labor Relations Authority. The chamber is expected to begin consideration as soon as this week on two Tax Court nominations: Kashi Way, who is Legislation Counsel at the Joint Committee on Taxation, and Adam Landy, a Special Trial Judge. "What's less clear is whether Senate Majority Leader Chuck Schumer brings the bipartisan tax bill negotiated by Senate Finance Chair Ron Wyden (D-Ore.) and House Ways and Means Chair Jason Smith (R-Mo.) up for a vote before the upcoming August recess," Morning Tax reported this morning.

The House is back today with votes on several Veterans' Affairs and other bills beginning at 6:30 p.m. The remainder of the week is expected to focus on FY2025 appropriations bills: Energy and Water (H.R. 8997); Interior, Environment, and Related Agencies (H.R. 8998); Financial Services and General Government (H.R. 8773); and Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (H.R. 9027).

Tax — Tax and other policy matters are clearly being overshadowed by broader issues in the presidential race, but are still on the radar.

A story in the July 19 WSJ, "GOP Sees Trump Unbound as Chance to Remake U.S.," said, "Outside advisers to Trump have in recent weeks pitched him on additional economic policy measures. Art Laffer, one of the founding theorists of supply-side economics, said he had recommended that Trump propose a 50% waiver of the payroll tax and 100% expensing of capital purchases for the first 18 months of his potential second term. 'So, you make it very, very attractive for people to go to work, and you make it very, very attractive for employers to employ those people,' Laffer said on Wednesday. 'And you have a deadline so if you don't do it now, you don't get it.'"

In a Bloomberg interview, former President Trump said of the TCJA corporate tax rate reduction to 21%: "I liked 20% better. I like 15% yet better, but I think that would be, you know, that'd be hard … Fifteen would get us down to being about the lowest. Look, when I did those tax cuts, this place started to boom." The Tax Foundation said July 17 that lowering the corporate rate to 15 percent would reduce federal revenue by $673 billion from 2025 to 2034 on a conventional basis.

There continues to be significant attention on the House Ways & Means Committee Republican tax teams that are focused on 2025 TCJA expirations and are expected to be active during the August recess. Rep. Kevin Hern (R-OK), who chairs the Ways & Means global competitiveness tax team, has said the group would hold an August 8 meeting with stakeholders in Atlanta. On the full Committee's schedule, "The Ways and Means Committee will hold a field hearing at the Iowa State Fair on Aug. 16 with a focus on the 2017 Trump tax cuts," Punchbowl News reported last night.

CRA — A July 9 Congressional Research Service (CRS) report, "The Congressional Review Act: The Lookback Mechanism and Presidential Transitions," provided some insight into the CRA process, which applies to a rule submitted to Congress either less than 60 days of session in the Senate or less than 60 legislative days in the House before Congress adjourns sine die, with a new period for congressional review of that rule becoming available in the next session of Congress.

"CRS unofficially estimates that Biden Administration rules submitted to the House or Senate on or after August 1, 2024, until the end of the second session of the 118th Congress are likely to be subject to the CRA lookback provisions and will qualify for additional periods of CRA review in the first few months of the first session of the 119th Congress (2025)," the report said. "These renewed periods of review are likely to permit disapproval resolutions aimed at such rules until late March 2025 and make the CRA 'fast track' procedures available to consider such joint resolutions in the Senate until late May or early June 2025."