For the first time in eight years Republicans have won control over both houses of Congress. This, according to a recent article by McGuire Woods Consulting LLC will impact tax policy.
Although Republicans do not have the 60 senate votes needed to prevent a Democratic filibuster, they can still get some laws passed by recruiting between six and eight Democrats to join (depending on the final outcome of the outstanding elections in Alaska and Louisiana).
In 2015, Sen. Orrin Hatch (R-UT) will become the chairman of the Senate Finance Committee, while Paul Ryan (R-WI) is widely expected to assume the chairmanship of the House Ways and Means Committee. Both men have been vocal proponents of tax reform.
Although large corporate tax reform may be off the table. Ryan has already stated they he would prefer the Joint Committee on Taxation to use macroeconomic scoring of tax legislation, to account for economic growth that results from tax code changes.
According to McGuire Woods Consulting, other areas of tax policy where compromise is more realistic include: repeal of the medical device tax and replacing the Obamacare 30-hour threshold for classification as a full-time employee for purposes of the employer mandate with a 40-hour threshold.
Posted by Theodore H. Waggner, Esq., Associate Editor, Wealth Strategies Journal