December 11, 2021
Senate Finance Chairman Ron Wyden (D-Ore) on December 11th released a rough draft of the tax measures that could potentially be included in the chamber’s tax and spending reconciliation bill.
The text (totaling over 1,100 pages) that was released today is not expected to be the final draft. In fact, provisions currently included in the bill could be modified, or even struck, from the underlying legislation, according to the Senator.
“[N]egotiations are going to continue because there are still some outstanding issues,” Wyden told reporters on December 9th.
Senators are currently talking with the chamber’s parliamentarian about which provisions meet the requirements to be included in the bill. These discussions are expected to end this week, at the earliest. Until they are completed, it will be difficult to know what provisions will be in the final draft of the legislation.
Currently, the bill does not include a modification to the $10,000 cap on the State and Local Tax Deduction. The House-passed legislation increases the cap to $80,000, but several Senators oppose that measure because they think it benefits wealthier taxpayers.
Lawmakers in the upper chamber are discussing lifting the cap entirely for middle-class taxpayers while keeping it intact for wealthier taxpayers. There has been no agreement on what dollar figure should designate who can and can’t claim the full deduction.
A provision modifying the current SALT cap is expected to be in the final draft of the Senate’s bill. It is not clear what that provision will be, but there is a placeholder in the bill for it.
Page 750 of the bill states the following:
SEC. 127601. [PLACEHOLDER FOR COMPROMISE ON DEDUCTION FOR STATE AND LOCAL TAXES]
The draft bill also does not include a surtax on billionaires. Wyden is a chief advocate for the provision, but opposition to the measure by House and Senate Democrats has precluded it from being included in the bill. However, Wyden will speak with lawmakers next week in the hopes of getting it included.
“I’ll be talking to my colleagues about it tomorrow and through the weekend,” Wyden told reporters on December 9th.
There is no placeholder in the bill Wyden released today for a billionaire’s tax.
Two provisions cut from the House-passed bill that do not appear in Wyden's bill is the tax on vaping and allowing prisons to be recognized as REITs, according to the Senate Finance Committee.
The following tax proposals are currently included in Wyden’s bill (not an extensive list and many provisions are in the House-passed bill). It is also worth repeating that these provisions are subject to change:
Again, changes could occur to these provisions, but the final product will be included in the reconciliation package. There are twelve Senate committees that are working on a portion of the bill. So far, eight of them have released their proposals.
Senator Chuck Schumer (D-NY) wants the Senate to pass the reconciliation bill before Christmas so the House can approve it shortly thereafter and President Joe Biden can sign it into law before the end of the year. It is not clear if this goal will be met.
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