President Donald Trump and the House’s top tax writer said separately Wednesday that Republicans are working on a second round of tax cuts.
House Ways and Means Chairman Kevin Brady (R-Texas) declined to discuss many details of what Republicans have in a mind, but said a proposal would be unveiled sometime this year.
“We think even more can be done,” he said in an interview with Fox Business News. “We want to make sure we’re encouraging innovation in America, we want to help families save for the long term.”
Later in the day, Trump said there would be a "phase two" for tax cuts, though he didn't provide any details either.
“It’s going to be something very special. Kevin Brady’s working on it with me,” Trump said at a roundtable discussion in St. Louis with business executives, workers and educators.
Brady suggested the plan would call for extending the slate of tax cuts for individuals now due to expire at the end of 2025.
“While the tax cuts for families were long term, they’re not yet permanent, so we’re going to address issues like that," he said.
The plan would be separate from any effort to fix glitches in the Tax Cuts and Jobs Act, H.R. 1 (115), Brady added.
The idea may be to give Republicans more fodder for their campaigns, ahead of what’s certain to be a difficult midterm election contest, rather than actually trying to enact more tax changes this year.
Republicans appear poised to lose a special House election in a pro-Trump area of Pennsylvania, where they unexpectedly abandoned their tax-cut message in the waning weeks of the race.
A second tax-cut proposal would also give Republicans a chance to revive a number of ideas they were forced to drop during consideration of their tax-code rewrite, such as a long-sought cut in the capital gains tax rate.
Any sincere effort to move another round of tax cuts through Congress this year would face long odds.
It would surely draw objections over its cost, after the recent tax law added $1.5 trillion to the government’s already huge deficits. And Senate Democrats could easily block legislation because Republicans plan to skip writing a budget this year, which means they won’t be able to tap the fast-track “reconciliation” process used to enact the recent tax changes.
When asked last week about the Republicans’ upcoming tax agenda, House Speaker Paul Ryan said, “I don’t think there’s going to be any big changes coming through.”
Republicans do not have a timetable for producing the plan, Brady said, beyond releasing it this year.
He also ruled out some ideas, saying Republicans won't undo a $10,000 cap on a deduction for state and local taxes, nor abandon plans to kill, beginning next year, a long-standing break for alimony payments.