Capitol Hill Recap: Another GOP Tax Bill Slips Further Away

Mirages are always just on the horizon, no matter how long you walk towards them.

Many Republicans are wondering if a follow-up tax bill to the One Big Beautiful Bill Act is a mirage, with party leaders pushing the window for its passage further and further ahead into the future.

The party has taken the steps towards passing yet another bill through the reconciliation process, which would allow Senate Republicans to pass it with a simple majority, bypassing a Democratic filibuster. But the resolution passed by the House of Representatives on Wednesday did not include the House Ways and Means Committee—meaning that, unless they amend it, the final product likely will not include significant tax changes.

It’s not a major surprise. The discussion about another reconciliation bill has shifted towards military spending, voting measures being pushed by President Trump, and other priorities. Adding more could imperil the bill, which faces difficult odds as it is.

Now lawmakers are floating the possibility of yet another reconciliation bill—this would be the fourth in this Congress that began in January 2025—for the lame duck session after the midterm elections. That’s already looking to be a busy season, and a partisan bill could make it harder to get any bipartisan work done, on issues like cryptocurrency taxation or tax administrative reform.

Rep. Jason Smith, R-Mo., chairman of the Ways and Means Committee, protested being left out of the process for this reconciliation bill. But he has also frequently claimed that, rather than passing another tax bill to address voter concerns about the cost-of-living, Republicans should do more to make people aware of what was in the One Big Beautiful Bill Act.

That’s always been a tall order—policies like the deduction for tips and overtime poll well, but affect relatively few people. Things like bonus depreciation or expensing for research and development could benefit more voters through job growth, but are complicated to explain to non-tax experts.

That leaves Republicans in tough re-election races few options—and the window to pass more before election day may have closed for good.

Recent Tax Pieces:

Senate Democrats Call on Watchdog to Investigate Kies Departure – Chris Cioffi, Bloomberg Tax ($):

Thirteen Senate Democrats demanded a government watchdog probe into whether Trump administration officials violated federal laws prohibiting political influence over federal tax audits.

The letter comes in response to the departure of Ken Kies, who led the Treasury Department’s Office of Tax Policy and oversaw the legal arm of the IRS in an acting capacity.

The lawmakers cited recent media reports that Kies was forced out after a clash with White House officials over a request that may have violated Section 7217 of the Tax Code. The law prohibits senior administration officials from requesting, directly or indirectly, that the IRS conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer.

GOP Advances Bill Giving Congress Veto Power Over DC Tax Hikes – Daniel Moore, Bloomberg Tax ($):

Efforts by the District of Columbia to impose or increase a tax or fee would be subject to congressional approval under a bill Republicans on the House Oversight Committee advanced Wednesday.

The DC Taxing Authority Review Act (H.R. 9720) is the latest move by the Republican-controlled Congress to exert control over tax policy set by Democratic leaders in the DC government. The bill dictates that such tax changes wouldn’t take effect unless Congress passes a joint resolution of approval within 60 days after receiving the policy update.

House Democrats Introduce Bill to Restore Boosted IRS Funding – Cady Stanton, Tax Notes ($):

Democrats in the House are kick-starting a legislative effort to restore boosted funding for the IRS in response to the piecemeal rescission in recent years of much of the extra money the agency received in 2022.

The Stop Corporations and High Earners from Avoiding Taxes and Enforce the Rules Strictly (Stop CHEATERS) Act (H.R. 9736), introduced July 20 by House Ways and Means Committee member Suzan K. DelBene, D-Wash., would provide $83 billion in supplemental IRS funding, including $45.6 billion for enforcement, $25.4 billion for technology modernization, $9.6 billion for taxpayer services, and $3.1 billion for business systems.

A similar bill (S. 4298) was introduced in the Senate April 15.

Trump Tax Law Has Errors But Congress Is in No Rush to Fix Them – Macon Atkinson, Bloomberg Tax:

A technical corrections package is typically a nonpartisan bill that is intended to correct drafting errors, aligning a new law with congressional intent, or addressing unintended consequences as Treasury and IRS develop regulations.

There are just a few legislative days left before August recess with a lengthy Congress to-do list — which could be derailed by a slimmer majority due to the sudden death of Sen. Lindsey Graham (R-S.C.) and Sen. Mitch McConnell‘s (R-Ky.) continued absence.

“We weren’t going to see a reconciliation package. I’m surprised we’re even talking about a technical corrections package,” said Rep. Richard Neal (D-Mass.), ranking member of the House Ways and Means Committee.

The Bells and Whistles of Trump Accounts – Marie Sapirie, The New York Times ($):

The Trump administration is clearly trying to make the experiment of largely government- and philanthropist-funded accounts a signature policy. The White House has evidently been active in recruiting and publicizing contributions from wealthy Americans and large domestic companies. Its latest foray into accepting stock donations — likely of greatly appreciated stock — is poised to accomplish two administration goals: boosting the profile of Trump accounts to entice more families to sign up and eliminating capital gains, at least for donors.

Public Domain Supervillain of the Week

Every week, a new villain from the Golden Age of comics, who's fallen out of favor.

This week's entry: The Bug.

Debut Year: 1941

Debut Publication: Pep Comics #12

Arch-nemesis: Fireball (see August 6, 2025 post)

Origin story: Unknown.

Abilities: A prolific pyromaniac and arsonist--whose fire helped create the hero Fireball, who ended his career of destruction.