From the President – 7-18 – War on the Successful

As reported earlier in the week, Representative MikeThompson (D-CA) introduced the Taxpayer Certainty and Disaster Tax Relief Act of 5 2019′, legislation that would extend a variety of expired or expiring tax provisions thru 2020. 

These provisions have been labeled the “tax extenders,” as they have routinely been renewed many times retroactively after they’ve expired. Our issue, of course, is the way the bill is paid for which is byaccelerated sunset of the estate tax exemption increase by three years: from January 1, 2026, to January 1, 2023. The text of this can be found in Section 201 of the Taxpayer Certainty and Disaster Tax Relief Act of 2019.

On Thursday the House Ways and Means Committee debated the legislation. Chairman Richard Neal (D-MA) opened the hearing by criticizing the Republican-passed TCJA for exasperating a trend of income inequality where the wealthiest members of society are reaping the benefits of tax cuts, while middle-class Americans continue to face a rising cost of living.

He held out the legislative package before the Committee as a positive step to rectify the effects of the 2017 tax law.

During the debate, Democrats emphasized that H.R. 3301 would offset the cost of renewing these tax breaks by including the estate tax changes, which they criticized as functioning as a massive tax cut for the wealthiest estates in America. Representative Mike Thompson (D-CA), however, emphasized that the legislation did not alter the Estate Tax rate.  

Representative Jason Smith (R-MO) – the lead sponsor of the Estate Tax Repeal Act of 2019 – offered an amendment to strike down using the estate tax to pay for the tax extenders bill. 

He made the case that accelerating it exacerbates uncertainty to farms and businesses. There was no statement by any of the Democrats on this amendment, but it was voted down on a party-line vote with 16 Republicans voting for and 24 Democrats voting against. The Committee then approved the bill by a party-line vote of 25-17, freeing the measure up for full House consideration.

However, it seems unlikely that the bill will ever see a full House vote but instead be used as a House Democratic marker for future bipartisan, bicameral tax negotiations. 

On the other side of the Capitol, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) have introduced bipartisan legislation to address the extenders. The Senate bill does not include any way to pay for the tax breaks. 

Senate Finance Chairman Chuck Grassley (R-IA) told reporters that he thinks Neal has it exactly backward — that Congress historically hasn’t and shouldn’t offset tax extenders, but should find pay-fors if it wants to expand refundable credits. This sentiment was echoed by Senate Finance Member Ben Cardin (D-MD) who said he didn’t think lawmakers need to offset the cost of renewing extenders because it is already current policy. Grassley (R-IA) took that one step further and added that it was a “non-starter to mess with our tax bill that’s helping the economy so much.

We now expect our issue to be part of any “grand bargain” that are cut to keep the government open/raise the debt ceiling and will continue to meet with both Democrats and Republicans to educate them on the harm the Estate Tax does to family businesses and do not include a rollback of the exemption to pay for corporate tax breaks.

BIDEN: Former Vice President Joe Biden on Monday told a clergy-led group focused on fighting poverty that the United States could afford free community college and “total health care” if it rolled back parts of President Donald Trump’s signature 2017 tax overhaul. “We have the greatest income inequality in the … United States of America since 1902. “The fact here is, there is plenty of money to go around,” Biden said as he was the first of nine Democratic presidential candidates to address the Poor People’s Campaign Moral Action Congress at Trinity University.

“This isn’t about punishment…this is just plain fairness. Simple, basic fairness and we have all the money we need to do it.” Among other things, he said eliminating tax credits and loopholes would pay for universal access to Medicaid.   Read More…

DeBlasio: This is reminiscent of another presidential aspirant – although much less credible odds of winning – NYC Mayor Bill DeBlasio who said, “Brothers and sisters, there’s plenty of money in the world. There’s plenty of money in this city. It’s just in the wrong hands.” 

BIDEN continued this line of thinking at a couple of other fundraising events, such as a fundraiser at the law firm Paul Weiss in New York where he said, “you represent a lot of really good people, you represent a lot of people in need, you represent everybody,’ he told the room.

‘But here’s the deal: This wealth gap that exists in the United States of America is so profound now, it is the stuff of which — not revolutions but political disillusionment — occurs. Disillusion occurs.” And to a room full of rich people he said:

“By the way, you know, remember I got in trouble with some of the people on my team, on the Democratic side, because I said, ‘You know what I’ve found is rich people are just as patriotic as poor people.’

Not a joke. I mean, we may not want to demonize anybody who has made money. “The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it’s all within our wheelhouse and nobody has to be punished. No one’s standard of living will change, nothing would fundamentally change.