KPMG has issued a report that analyzes potential tax legislation in the Fall of 2019. The executive summary of the report is as follows:
Although there’s a possibility that some tax legislation that has broad bipartisan support in both the House and the Senate could move forward on its own, the best chance for tax legislation to be enacted in what’s left of 2019 appears to be for a negotiated “consensus package” of tax provisions to be attached to a larger “must pass” vehicle—like a CR. Nonetheless, there’s no guarantee that this will happen—particularly if larger politics result in efforts to keep any CRs free of extraneous, non-spending provisions.
If there is an opportunity to enact tax legislation this year, tax activity in the House and Senate earlier this year provides some indication of at least some of the issues that might be in play. So far, the House, the Senate, and/or the tax-writing committees have “teed up” tax legislation addressing matters such as:
- Extending expired or expiring tax preferences (commonly called “extenders”)
- Disaster relief
- Retirement savings
- Provisions that were enacted as part of Pub. L. No. 115-97 (commonly called the “Tax Cuts and Jobs Act” or “TCJA”) relating to the “kiddie tax” as well as the unrelated business income tax (“UBIT”) treatment of fringe benefits
- Tax treatment of legally married same-sex couples
- The so-called “Cadillac tax” on high-cost employer-sponsored health coverage
- The so-called “PCORI fee”
- Expanding the earned income tax credit (“EITC”), child tax credit, and dependent care assistance
- Tax treatment of investment income of certain private foundations
Indeed, based just on activity that already has taken place, there appears to be common ground (at least so far) between the House and the Senate on possibly doing something on extenders, disaster relief, retirement security, and the TCJA “kiddie tax” provision.
Moreover, if a tax package is negotiated, the issues that ultimately might be raised could end up being even broader than the issues considered by the House, Senate, or tax-writing committees so far. For example, other issues that ultimately might be addressed could include: some of the most popular proposed technical corrections to the TCJA; the fate of the medical device excise tax (“MDET”); other issues that are priorities to particular members; and additional “revenue-raising” provisions. It also is possible that the president might put additional tax proposals on the table at some point in the process.
Click here to read a printable pdf version of this report that contains helpful images and charts: U.S. Congress back in sesson, possible tax agenda
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.