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White House Remains Focused on Tax Reform – Phase Two

The White House and Republican lawmakers are continuing discussions focused on a second round of tax reform, according to President Trump’s top economic advisor. National Economic Council Director Lawrence Kudlow indicated that Trump and House Ways and Means Committee Chairman Kevin Brady, R-Tex., again discussed a “phase two” of tax reform. According to Kudlow, Trump and most GOP lawmakers are in agreement that full expensing for business investments and individual tax cuts should be made permanent. Those specific tax provisions under the Tax Cuts and Jobs Act (TCJA) are currently temporary. “I think you get more bang for the buck on these tax cuts if you do make it permanent,” Kudlow said. He believes there are other ideas being discussed that could also become part of the plan, but did not elaborate on specifics. He concluded, “Perhaps, later this year we will see something more concrete.”

Looking Forward

Trump also discussed the tax return filing process changes expected for next year. “Next April, you are going to, in many cases, [file on] one page, one card…you’ll have a nice simple form next year,” Trump said.

To that end, Senate Majority Leader Mitch McConnell, R-Ky., wrote in an April 6 op-ed in Kentucky Today that the current tax return filing process, which includes “complicated paperwork,” will soon come to an end. “As a result of the historic overhaul of the federal tax code, this is the last time that you will have to file under the outdated and expensive system that has held our country back for far too long,” McConnell wrote.

Democratic Changes

Meanwhile, most Democratic lawmakers continue to criticize the tax law changes under the TCJA. House Minority Leader Nancy Pelosi, D-Calif., said that only corporations and the wealthy benefit from the new law. “Powerful special interests are reaping massive windfalls from the GOP tax scam,” Pelosi said. Earlier in the week, while speaking at a tax event in California, Pelosi reportedly said that Democrats would take a bipartisan approach toward revising the TCJA if they regain the House majority in 2019. According to Pelosi, Democrats are interested in creating a tax bill that creates growth and jobs while simultaneously reducing the deficit.

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