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Senate Completes Vote-a-Rama to Advance Budget Resolution: On April 4 and 5, the Senate considered the FY 2025 budget resolution H.Con.Res.14, concluding in the traditional “vote-a-rama” on amendment and final passage by a vote of 51-48. Sens. Rand Paul (R-KY) and Susan Collins (R-ME) joined Democrats in opposing the resolution and Sen. Patty Murray (D-WA) was not present. Senators took roll call votes on 21 amendments and approved only one, offered by Sen. Dan Sullivan (R-AK), which is intended to protect Medicare and Medicaid. Seven additional amendments failed by voice vote, for a total of 28 considered amendments. Brownstein’s tracker of filed amendments can be accessed here.
Proposed 40% Marginal Tax Bracket for Million-Dollar Earners Linked to CTC Expansion: To offset the cost of extending the expiring tax provisions of the Tax Cuts and Jobs Act (TCJA, Pub. L. 115-97) and adding President Trump’s tax-policy priorities, some Republicans are reportedly considering creating a new 39% to 40% tax bracket for those earning $1 million or more annually. The TCJA had decreased the top individual rate to 37% and increased the threshold for the top tax bracket ($609,351 for single filers and $731,201 for joint filers in 2024). It is unclear whether the proposed $1 million bracket would apply to both single and married couples or include relief to such a marriage penalty. Interest in the proposal follows recent reports that consideration is being given to allowing the TCJA-enacted top tax rate to expire and revert to 39.6%, as discussed in the April 2 issue of Taxation & Representation.
JCT Releases Updated Analysis of TCJA Cost Estimate, Lawmakers Respond: On April 3, Joint Committee on Taxation (JCT) Chief of Staff Thomas Barthold responded to an inquiry from Senate Finance Committee Ranking Member Ron Wyden (D-OR), Senate Budget Committee Ranking Member Sheldon Whitehouse (D-RI), House Ways and Means Committee Ranking Member Richard Neal (D-MA) and House Budget Committee Ranking Member Brendan Boyle (D-PA) with an analysis of the cost of extending the expiring tax provisions of the Tax Cuts and Jobs Act (TCJA, Pub. L. 115-97). While applying an unusual 11-year time frame, the report estimates the cost to be $4.6 trillion ($5.5 trillion when accounting for interest), an increase from JCT’s previous estimate that a clean TCJA extension would cost $4 trillion ($4.6 trillion when accounting for interest), but the latter estimate was based on the traditional 10-year budget window. Despite the inconsistent comparative time frames, the lawmakers issued a press release highlighting JCT’s analysis, stating that extending the TCJA would amount to “economic recklessness.”
Trump’s Tariff Actions Potentially Affect OECD Global Tax Agreement, Transfer Pricing: On April 2, President Donald Trump issued a series of executive orders (EOs) to impose reciprocal tariffs on select countries and revoke China’s eligibility for the de minimis exemption. The EOs include an across-the-board 10% tariff on all countries that took effect on April 5, as well as additional country-specific reciprocal tariffs to take effect on April 9 based on “conditions reflected in large and persistent annual U.S. goods trade deficits,” with higher tariff rates applicable to countries with larger trade deficits with the United States.
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