Tax Cuts 2.0 was discussed in a July 17 meeting at the White House by President Donald Trump and House GOP tax writers. Prior to the meeting, Trump and House Ways and Means Chair Kevin Brady, R-Tex., reiterated to reporters at the White House that the next round of tax cuts will focus primarily on the individual side of the tax code

Individual Tax Cuts

The focus of the discussion was how to further strengthen the economy post-tax reform.  “We think the best place to start is with America’s middle class families and our small businesses,” Brady said. He also said that making permanent the individual tax cuts that are set to expire in 2026 under the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) is a top priority for Republicans.

Corporate Tax Rate

President Trump is also calling for lowering the corporate tax rate to 20 percent. The corporate tax rate was lowered last December from 35 percent to 21 percent by the TCJA.

Brady told reporters that discussions between House GOP tax writers and the White House were continuing on the possible proposal. While Brady did not openly commit to the notion of further lowering the corporate tax rate, he did tell reporters that he thinks the president is right that global competitors will likely respond in kind to last year’s tax reform.

Tax Cuts 2.0 Timeline

The House is expected to vote on the Tax Cuts 2.0 package in September, Brady told reporters at the White House on July 17. Additionally, Brady stated that he anticipates the “Senate setting a timetable, as well.”

Brady’s estimated timeline for votes on the tax cuts package is in line with his statements in June that House GOP members will receive a legislative outline of the proposal this month. Further, a draft of the tax package is expected to be released publicly in August.

Senate

At this time, the Tax Cuts 2.0 package is not expected on Capitol Hill to fare well in the Senate. The package would need at least nine Democratic votes to clear the chamber.

“The GOP tax scam was a huge tax break for big corporations,” Sen. Tammy Baldwin, D-Wis., said in a July 17 tweet. “We should reward work, not just wealth,” she added. While Democrats remain outspoken against the TCJA for primarily benefiting corporations, Republicans are hopeful for Democratic support, just prior to midterm elections, on a measure that focuses on individual tax cuts.

If you have questions about the Tax Cuts 2.0, contact an MCB Tax Advisor at 703-218-3600 or click here. To review a summary of recent tax news articles, click here. To learn more about MCB’s tax practice and our tax experts, click here.

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