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Trump, Pelosi Eye 2017 Tax Rollbacks In Next Virus Bill

Courtesy of ZeroHedge View original post here.

President Trump and House Speaker Nancy Pelosi are looking at rolling back some of the more controversial pieces of the 2017 tax overhaul, as the White House and Congress hammer out the next round of economic stimulus.

Under discussion are lifting the cap on state and local deductions, as well as restoring the break for entertaining business clients, according to Bloomberg.

According to the report, Pelosi says the next round should suspend the $10,000 cap on deducitons for state and local taxes, while President Trump said in a Wednesday tweet that tax breaks for corporate client outings, dinners, sporting games, cruises and concerts should be restored. The 2017 tax law eliminated writeoffs for entertainment expenses, while leaving a 50% deduction for client means untouched. 

“This will bring restaurants, and everything related, back – and stronger than ever. Move quickly, they will all be saved,” wrote Trump.

Congress must pass the old, and very strongly proven, deductibility by businesses on restaurants and entertainment. This will bring restaurants, and everything related, back – and stronger than ever. Move quickly, they will all be saved!

— Donald J. Trump (@realDonaldTrump) April 1, 2020

“I think it will open up the restaurant business,” Trump said during a Wednesday evening White House briefing.

According to the report, the changes may be easier said than done.

The deduction cap for state and local taxes was a large cost-saving measure in the $1.5 trillion tax-cut plan enacted in 2017, and reversing that would benefit people largely in states run by Democrats. Republicans have already called the idea a “non-starter” and accuse Democrats of using the virus crisis to repeal the most politically contested portion of the tax law. -Bloomberg

According to Veena Murthy, an executive at accounting firm Crowe LLP, Congress would have to roll back decades of tax-code adjustments to make meals and entertainment costs fully deductabletelling Bloomberg “I don’t think that’s going to happen.”

SALT(y)

The 2017 law’s limit on deductions for state and local taxes largely affect Democratic-controlled regions with high taxes, such as New York, California and New Jersey. As such, Republicans aren’t excited about the idea of rolling back the rules.

“I’m not going to allow this to be an opportunity for the Democrats to achieve unrelated policy items they wouldn’t otherwise be able to pass,” said Senate Majority Leader Mitch McConnell in a Tuesday interview with Hugh Hewitt.

Discussion of a new round of economic stimulus is in the early stages, and Pelosi said Wednesday the House might take up a bill soon after its scheduled return to Washington April 20.

The SALT limit and other cost-saving measures were necessary to keep the massive 2017 corporate and individual income tax cut below a $1.5 trillion price cap — a condition of the budgetary process Republicans used to pass it without Democratic votes. -Bloomberg

And according to Bookings Tax Policy Center senior fellow Steven Rosenthal, “Republicans used budget gimmicks to keep the costs down,” adding “They took deductions that would have been within the 10-year budget window and pushed them outside of the window.”

According to the report, the proposed changes were already on several lawmakers’ wish lists.

At first glance I was like, ‘Really? Wow, way to go lobbyists,’” said Gordon Gray, director of fiscal policy at the right-leaning American Action Forum. “And then I sat down to think about it. We’ve closed a lot of businesses so some of these make sense.”


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