November 9, 2017

House Ways & Means Committee Complete Markup of H.R. 1, Tax Cuts and Jobs Act

Key Takeaways

• Democratic Amendments: None of the amendments introduced by Democrats were agreed to in party-line votes.
• Tax-Exempt Bonds: Reps. Suzan DelBene (D-Wash.) and Terri Sewell (D-Ala.) introduced amendments that would repeal the sections in H.R. 1 that repeal private activity bonds (PABs) and advance refunding bonds, respectively. Neither amendment was agreed to in party-line votes.
• Carried Interest: Rep. Sandy Levin (D-Mich.) introduced an amendment that would close the carried interest loophole, identical to legislation introduced in 2015. The amendment was not agreed to.
• Summary of Day 4 Amendments: On November 9, debate continued and additional Democratic amendments were introduced, as well as Chairman Kevin Brady’s (R-Texas) manager’s amendment.
• ABLE Accounts: Brady’s manager’s amendment included a provision that would allow families to rollover current 529 savings plans into an Achieving a Better Life Experience (ABLE) accounts. The manager’s amendment was agreed to in a XX-XX vote.
• H.R. 1 Passes: In a 24-16 party-line vote, H.R. 1 was voted favorably to the House.

Bill Considered

• H.R. 1, Tax Cuts and Jobs Act 

Opening Statements

Rep. Kevin Brady (R-Texas), Committee Chairman

In his opening statement, Chairman Brady called the Tax Cuts and Jobs Act “historic legislation,” saying the bill will bring “lasting relief” to American workers, families, and job creators. Brady called the current tax code “broken, complex, and unfair,” saying the legislation is meant to provide “overdue relief” for the American people, noting it has been more than three decades since the tax code was reformed. Brady stated the legislation would result in a four percent higher gross domestic product (GDP) in the long-term, a three percent increase in wages, and a four percent increase in after-tax income, and the “lowest tax rates in modern history” for American businesses of all sizes. Brady called the legislation a “restoration of basic freedoms” that would allow nine out of ten Americans to file their tax returns on a postcard.

Rep. Richard Neal (D-Mass.), Ranking Member

In his opening statement, Ranking Member Neal called the legislation a “bad idea for millions of Americans.” Neal criticized the partisan nature of the legislation’s drafting, noting the 1986 tax reform process was bipartisan, with “countless opportunities” to examine the legislation and make substantial changes, including 30 hearings, 450 witness testimonies, and 26 days of markup. Neal agreed the current tax system is complicated, and holds back businesses from competing in the global economy, stating there is a need for “real reform for real people.” Neal said the legislation “fails to provide needed improvements” to assist American families and expand opportunities, calling the legislation “flawed.” Neal noted the legislation could have a “huge influence” on the housing market, lead to lower home values, and eliminate new markets tax credit and advance funding in private activity bonds.

H.R. 1, the “Tax Cuts and Jobs Act”

Rep. Lloyd Doggett (D-Texas) moved to postpone consideration of the legislation to the following week, November 14, and to notice the first public hearing on the bill. Doggett stated the objective of the motion was “insight, not delay.” Doggett criticized the lack of any public hearings on the bill, and that the administration has sent no expert witnesses to testify. The motion was defeated in a party-line vote, 24-16. 

Joint Committee on Taxation (JCT) Presentation by Thomas Barthold, JCT Chief of Staff
Barthold discussed the individual changes to income tax brackets, as well as the different provisions that would be repealed, such as personal exemptions. He discussed the maximum rate passthroughs would be subject to, the increase in child tax credit, modifications to the American Opportunity Tax Credit (AOTC) and 529 plans, and discussed both the itemized deductions for mortgage interest and charitable contributions. Barthold then explained changes to business income, to include lowering the corporate rate to 20 percent, repealing the alternative minimum tax (AMT) for corporations, the new limitation on net interest expense that can be claimed by businesses, the termination of private activity bonds (PABs) and advance payment bonds (APBs), and cross-border issues, including the movement to a territorial system.

Republican Support
Rep. Peter Roskam (R-Ill.) asked what the middle class can count on with H.R. 1, and whether all people will receive tax relief in 2019 with the proposed legislation. Barthold explained that H.R. 1 would almost double the standard deduction, generally increase tax bracket break points, repeal the AMT, retain and expand the child credit, and give a tax benefit to all income categories in 2019.

Rep. Tom Reed (R-N.Y.) voiced his support for the bill, explaining that it takes the (approximately) 70,000-page Internal Revenue Code (IRC) and moves to H.R. 1, a 429-page bill, making taxes less complicated and fairer for everyone.

Rep. Carlos Curbello (R-Fla.) asked if the proposed bill would help end job shifting overseas, to which Barthold explained that lower corporate rates will provide clear incentives to make investments in the U.S.

Much of the Republican commentary focused around praising the bill for giving taxpayers a tax break by increasing the standard deduction, as only 29 percent of taxpayers currently itemize deductions and projections show only six percent are likely to itemize under H.R. 1. They also stated that the bill will make the tax code simpler, increase jobs and create a stronger economy, making the U.S. more competitive globally. 

Democratic Opposition
Much of the Democratic opposition focused on the lack of a public hearing with expert witnesses before the markup, and claimed the bill was written on a partisan basis. They also criticized the removal of itemized deductions, such as medical expenses, state and local taxes (SALT), education expenses, and changes to PABs and APBs.

Rep. Sandy Levin (D-Mich.) criticized House Speaker Paul Ryan (R-Wis.) for saying the proposed legislation focuses on middle-class relief, claiming that the distribution tables show otherwise.

Full and Immediate Expensing

Rep. Vern Buchanan (R-Fla.) asked what impact full and immediate expensing will have on businesses, to which Barthold replied that expanding expensing from $500,000 to $5 million for equipment will help businesses grow and create jobs.

Passthroughs

Rep. Erik Paulsen (R-Minn.) praised the lower passthrough rate of 25 percent, stating that it is the “lowest rate for mom and pop businesses in decades.” Other Republicans also supported the lower rate, explaining that it will help small businesses grow and create jobs. 

Amendment Offered by Rep. Brady

Brady offered an Amendment to the Amendment in the Nature of a Substitute that includes conforming amendments to Section 1005, new rules to the earned income tax credit (EITC) in Sections 1004 and 1005, the exclusion from income for up to $5,000 of employer-provided dependent-care assistance through 2022 in Section 1404, the preservation of the treatment of self-created musical compositions and copyrights in musical works as capital assets in Section 3311, a three-year holding period requirement for qualification as long-term capital gain with respect to certain partnership interests received in connection with the performance of services in Section 3314, updates to Section 3804 regarding employee stock options, modifications to the bill’s international base erosion rules in Sections 4004, 4301 and 4303, and updates to the excise tax based on investment income of private colleges and universities in Section 5103.

Regarding the modifications to the base erosion rules: 1) “the provision taxing affiliated payments is revised to provide for a foreign tax credit, to exempt foreign affiliates’ routine returns, to exclude acquisitions of property priced on a public exchange, to compute a foreign affiliate’s profits based on foreign profit margins instead of global profit margins, and to coordinate with existing withholding tax rules; 2) modifies the provision taxing foreign high returns to clarify the scope of existing exceptions for certain local active financing and extraction activities; and 3) clarifies the computation of the deemed repatriation tax on grossed-up foreign taxes deemed paid.”

Republicans voiced their support for the amendment, to include Reps. Jim Renacci (R-Ohio), Jason Smith (R-Mo.), Tom Rice (R-S.C.), Kristi Noem (R-S.D.), Paulsen, Kenny Marchant (R-Texas), Roskam, Lynn Jenkins (R-Kan.), Patrick Meehan (R-Pa.), and George Holding (R-N.C.).

Democrats voiced their opposition for the amendment, noting a lack of time to process the language and packaging multiple amendments into one package, as well as a lack of dynamic scores for each provision, and included Reps. Neal, Doggett, Mike Thompson (D-Calif.), John Larson (D-Conn.), Ron Kind (D-Mo.), Brian Higgins (D-N.Y.), Terri Sewell (D-Ala.), Suzan DelBene (D-Wash.), and Judy Chu (D-Calif.).

Higgins voiced concern over a lack of infrastructure funding, to which Brady explained that he has been told by the Administration that an infrastructure plan will be following tax reform at some point.

Doggett specifically noted his concern over the international updates to the base erosion rules, stating it will create ways around the 10 percent on high income, and encourages companies to outsource jobs to foreign soil. He continued that he will be offering an amendment that ensures profits earned abroad are taxed the same as profits earned in the U.S.

Levin raised concern over the carried interest provision, asking Barthold what impact substituting the one-year period to three-years will have. Barthold explained that while the JCT has not analyzed the impact of provisions in the amendment, it should be a revenue raiser. Doggett also raised concern over the provision.

The amendment was agreed to in a 16-24 vote.

Amendment Offered by Rep. Blumenauer

Rep. Earl Blumenauer (D-Ore.) introduced a “failsafe” amendment, arguing that if after two years the national debt continues to increase, H.R. 1 will be nullified. Other Democrats that supported the amendment included Reps. Neal, Doggett, Kind, Levin, Thompson, Bill Pascrell (D-N.J.), Larson, Joseph Crowley (D-N.Y.), Higgins, Linda Sanchez (D-Calif.), and John Lewis (D-Ga.).

Roskam voiced his opposition to the amendment, calling it a “poison pill,” and argued that economic growth cannot happen within the two years the amendment calls for, saying that it will happen during the 10-year budget window. Blumenauer stated he was willing to change the window to four years, but Roskam still opposed. Other Republicans that opposed the amendment included Reps. Devin Nunes (R-Calif.), Renacci, Mike Kelly (R-Pa.), Reed, Curbello, Meehan, Paulsen, and Mike Bishop (R-Mich.).

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell introduced his amendment, which would fully restore the SALT deduction, including property, state and local income, and sales tax paid, adding that Senate Finance Committee Chairman Orrin Hatch (R-Utah) plans to restore the SALT deduction in the Senate bill. Pascrell argued that the erosion of SALT is a tax increase, and that pairing this with changes to the mortgage interest deduction will cause housing prices to fall and push certain communities into a recession. Democrats who supported the amendment included Reps. Neal, Thompson, Doggett, Larson, Sanchez, Blumenauer, Higgins, Crowley, Chu, Danny Davis (D-Ill.), Levin, Kind, and Larson.

Rice argued that all taxpayers will continue to benefit under H.R. 1 even with the elimination of the SALT deduction and opposed the amendment. Other Republicans who voiced their opposition included Renacci, Reed, Kelly, and Roskam.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Kind

Kind introduced his amendment, which would eliminate the SALT deduction that businesses are able to deduct from their taxes, like H.R. 1 does for individuals, arguing that the amendment treats corporations and individuals the same. He continued that the individual SALT elimination is a “revenue grab” to pay for the elimination of the estate tax and AMT. Democrats argued that if the individual SALT deduction is being eliminated, the business SALT deduction should also be, and that it will be a revenue raiser. Other Democratic supporters included Reps. Thompson, Blumenauer, Levin, Larson, Sewell, Pascrell, DelBene, and Chu.

Nunes opposed the amendment, arguing that all businesses take advantage of the SALT deduction and that the deduction keeps them on a level playing field. Republicans argued that the elimination of the deduction would benefit the wealthiest Americans and move businesses to other countries with lower tax rates, and those who opposed the amendment included Reps. Adrian Smith (R-Neb.), Rice, Renacci, David Schweikert (R-Ariz.), and Curbello.

The amendment was not agreed to in a 15-23 vote.

Amendment Offered by Rep. Kind

Kind introduced his amendment that would restore the Work Opportunity Tax Credit (WOTC) that is eliminated under H.R. 1, explaining that it would be offset and paid for by a “commensurate” corporate tax rate increase. Other Democrats who supported the amendment included Reps. Pascrell, Larson, Davis, Pascrell, and Doggett.

Reed argued that the amendment was a way for Democrats to get Republicans to vote against issues they have been supportive of in the past. He asked if Democrats would vote for the overall bill on the House floor if the amendment was adopted, to which Pascrell replied no. Other Republicans in opposition included Reps. Adrian Smith, Renacci, Curbello, Reed, and Meehan.

The amendment was not agreed to in a 16-23 vote. 

Amendment Offered by Rep. Sanchez

Sanchez explained that her amendment “fixes” the child tax credit provision and ensures Puerto Ricans qualify for the child tax credit with their first child, not their third, and also makes the family flexibility credit permanent.

Reps. Adrian Smith and Noem opposed the amendment, stating that H.R. 1 already increases the child tax credit, making the amendment unnecessary.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Davis

Davis introduced his amendment, which would reinstate the adoption tax credit with refundability, and expand the child and dependent care tax credit (CDCTC) to address the rising cost of childcare for working families. Kelly also voiced support for the amendment. Democrats supporting the amendment included Reps. Larson, Sewell, and DelBene.

Rep. Adrian Smith opposed the amendment, stating that the adoption tax credit increases the cost of private adoption, leading Americans overseas. Brady noted that while he encourages members to not adopt the amendment, he will work together to find a “good positive direction forward” on the adoption issue.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Doggett

Doggett criticized H.R. 1, explaining that it encourages the outsourcing of American jobs, as well as profit. He continued that under H.R. 1, if a company builds a factory in the U.S., they will pay a 20 percent tax rate on it, but that if the factory is built overseas, they would pay 10 percent, or potentially not pay any tax on it. Doggett stated that while there is a 10 percent tax on high returns of American overseas operations, Brady’s amendment provides several ways to “circumvent” that requirement, and creates even more loopholes than there currently are. He explained that his amendment will ensure profits earned overseas will be taxed the same as profits earned on American soil.

Levin and Neal stated that the Committee should have had a month’s worth of hearing on the international tax system, hearing from expert witnesses on both sides of the issue, and that maybe they could have come to an agreement.

Higgins voiced his support for the amendment, stating that it fights corporate inversion “retroactively and prospectively.”

Chu voiced her support for the amendment, explaining that it maintains a corporate rate for multinational companies that is still lower than OECD rates.

Pascrell asked Barthold what incentives are in H.R. 1 that will incentivize American companies to bring jobs back to the U.S. Barthold explained that H.R. 1 lowers the rates on business income, as well as allows for full and immediate expensing of tangible assets.

Roskam voiced his opposition to the amendment, explaining that the U.S. needs to “get in sync with the rest of the world” and move to a territorial system. He criticized the amendment for creating a “worse situation” than there currently is, and that it will make the U.S. less globally competitive.

Holding opposed the amendment, explaining that he supports the move to a territorial system, stating that it is “one of the most common sense” provisions in H.R. 1, and that without the move, American companies are at a disadvantage with global competitors.

Schweikert also opposed the amendment, stating that it does the opposite of what it is intended to do.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Sewell

Sewell introduced her amendment, which would provide tax incentives for employers that provide apprenticeship programs by providing a 50 percent tax credit on the first $2,000 of wages paid to an apprentice and a 40 percent tax credit on the first $6,000 of wages paid to an employee who has completed apprenticeship training. Sewell stated the amendment would encourage both the training and hiring of American workers. Sewell discussed the skills gap, citing that the skills shortage is expected to cause 2 million of the expected of 3.5 million manufacturing jobs that are expected to go unfilled in the next decade, and called on the committee to be “proactive and intentional” in how it addresses the effort to provide skills training that can meet market demands. Democrats supporting the amendment included Reps. Davis, DelBene, and Sanchez.

Curbello opposed the amendment, stating that H.R. 1 incentivizes savings in 529 plans, which can be used to pay for apprenticeship programs. Curbello stated he agreed with the goal of the amendment, a new business tax credit was not the way to achieve it. Meehan also opposed the amendment.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Larson

Larson introduced his amendment, explaining that it will reinstate the medical expense deduction that H.R. 1 eliminates. Other Democrat supporters included Reps. Pascrell, Doggett, Kind, Davis, Chu, Sanchez, and Blumenauer.

Holding opposed the amendment, stating that H.R. 1 reduces taxes at every income level and that the medical expense deduction is no longer needed due to the increase in standard deductions in the bill. Other Republicans who opposed the bill included Reps. Roskam, Renacci, Schweikert, and Reed.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Lewis

Lewis introduced his amendment, stating that it strikes Section 5201 of H.R. 1, which repeals the Johnson Amendment. Doggett supported the amendment, as it will preserve the “independence and integrity” of religious organizations and charities. Other Democrat supporters included Reps. Neal, Thompson, Kind, and Davis.

Marchant argued that churches should be able to “speak their minds without fears of IRS agents monitoring what they say.” Meehan and Roskam also opposed the amendment.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Doggett

Doggett introduced his amendment, which will restore the “important education tax incentives” that H.R. 1 currently repeals, including the deduction for student loan interest and the tuition and fees deduction. The amendment will also allow teachers to continue to deduct the cost of classroom materials. Other Democrat supporters included Reps. Neal, Pascrell, Davis, Kind, DelBene, Chu, Sewell, and Larson.

Noem argued that provisions in H.R. 1 already support education and teachers, and argued that teachers will now be able to save over $1,000 in tax cuts. Other Republican opposers included Reps. Diane Black (R-Tenn.), Schweikert, Curbello, Bishop, Kelly, Paulsen, and Jackie Walorski (R-Ind.).

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Thompson

Thompson introduced his amendment, which extends tax relief for homeowners who receive mortgage debt forgiveness following home damages such as those due to a fire, flood, or mudslide. Thompson explained that under H.R. 1, homeowners would get a “tax hike” on their mortgage deduction. Thompson continued that his amendment would strike a portion of H.R. 1 that would increase the number of years a homeowner must live in their home to benefit from tax benefits. He explained that under current law, a homeowner must live in their home for at least two of the previous five years; H.R. 1 amends this requirement to at least five of the previous eight years. Thompson stated this is “patently unfair” and hurts working class families trying to move into better or bigger homes.

Schweikert stated the provision in H.R. 1 that requires residency in the home for five years is intended to “stabilize neighborhoods” and prevent people from “gaming the system” by continually flipping houses and benefitting from tax breaks.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Chu

Chu introduced her amendment, stating that it will help the middle-class by expanding the EITC to childless workers, as they are currently the only group excluded from the credit. Other Democrat supporters included Reps. Neal, Blumenauer, Davis, and Sewell.

Rep. Dave Reichert (R-Wash.) opposed the amendment, explaining that it does not address “any of the underlying issues,” and that childless workers should be engaged “in other ways,” such as welfare reform. Other Republicans who voiced opposition included Reps. Adrian Smith, Walorski, Rice, and Schweikert.

The amendment was not agreed to in a 16-24 vote. 

Amendment Offered by Rep. DelBene

DelBene explained that her amendment will reinstate private activity bonds (PABs) and expand the low-income housing tax credit (LIHTC), stressing that H.R. 1 as written will worsen the housing crisis through eliminating PABs.

Pascrell voiced his strong support for the amendment, stressing the importance of restoring PABs, as communities rely on them to fund infrastructure projects, adding that PABs are the “best method of pumping billions of dollars of private capital into public infrastructure projects.” Davis also voiced his support, stating that tax exempt bonds are “lifesavers,” and that without them, distressed communities will not get necessary redevelopment. Other Democrats who voiced their strong support for the amendment included Reps. Sewell, Levin, Kind, Blumenauer, and Neal.

Rep. Pat Tiberi (R-Ohio) stated that he is a “big supporter” of LIHTC and PABs, and that he does not disagree with Democratic arguments. He continued that while he wishes PABs were included in H.R. 1, he pledges to continue to work with Democrats and the Chairman on “tightening up language” to prevent abusing PABs for projects such as golf courses and office buildings. Chairman Kevin Brady (R-Texas) also stated he would continue to work on the issue. Other Republicans who opposed the amendment but pledged to work on improving using PABs for appropriate projects included Reps. Renacci, Paulsen, Kelly, Schweikert, and Marchant.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell introduced his amendment, which ensures tax relief for every federally declared disaster area, therefore not requiring an act of Congress for each new disaster. He explained that the amendment would be retroactive to 2012 and provide relief for recent victims of hurricanes and wildfires. Pascrell noted that there are still families affected by Hurricane Sandy in 2012 that are not back in their homes, and that selectively choosing relief for victims is “not good policy.” Neal also spoke in support of the amendment, and Thompson entered a written support statement into the record.

Nunes raised a point of order on the amendment because the amendment was not germane. Chairman Brady ruled the amendment not germane because it amends the Social Security Act. Pascrell appealed the order and called for a voice vote.

The motion to table the amendment was agreed to by voice vote, and agreed to in a roll call vote 23-16.

Amendment Offered by Rep. Sewell

Sewell introduced her amendment to restore advance refunding bonds, which she called an “important tool for financing infrastructure and other projects.” Sewell noted that advance refunding allows municipalities to take advantage of refinancing to lower interest rates, allowing taxpayer dollars to be used “as prudently as possible.” Neal spoke in support of the amendment, stating that one of the “most important opportunities at the local level” is what can be accomplished with tax-exempt bonds.

The amendment was not agreed to in a 16-24 vote. 

Amendment Offered by Rep. Crowley

Crowley explained that his amendment will create a permanent first-time homebuyers tax credit of $8,000, as well as assist military families who receive housing allowances, seniors with fixed income, and Section 8 families. Other Democrats who supported the amendment included Reps. Sewell, Chu, Larson, Neal, and Thompson.

Rice argued that the amendment is “another entitlement” and that Americans instead need more opportunities. He stated that H.R. 1 will give the middle-class more money each year, create more jobs, and stimulate the economy, and that rather than the $8,000 credit the amendment provides, the committee should focus on “onerous banking restrictions” that prevent people from buying homes. Reichert and Kelly also opposed the amendment.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell re-introduced his previous amendment on disaster relief, with the portion deemed germane removed. Pascrell explained his amendment ensures Puerto Rico can receive a full child tax credit, noting that Puerto Ricans pay federal taxes and therefore deserve access to the EITC. Neal stated it was an “important consideration” to supply aid to the people of Puerto Rico. Democrats supporting the amendment included Reps. Larson, Thompson, Sewell, and Davis.

Black spoke in opposition to the amendment, stating that disaster relief should be coordinated, appropriate, and targeted. Kelly also spoke in opposition to the amendment.

The amendment was not agreed to in a 15-24 vote.

Amendment Offered by Rep. DelBene

DelBene explained that her amendment fully repeals the Cadillac tax, as it negatively impacts working families. Reps. Sanchez, Larson, Davis, and Chu supported the amendment.

Kelly opposed the amendment, explaining that it is a “pay for” in the Affordable Care Act,” and that it does not belong in tax reform, but rather a healthcare bill.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Higgins

Higgins did not officially explain his amendment, though he questioned whether H.R. 1 would result in taxpayers receiving $4,000, claiming that the tax cuts will not be what Republicans and administration officials have claimed.

Reichert stated that the amendment is not germane and outside of the committee’s jurisdiction. Acting Chairman Roskam agreed and there was a recorded vote of 22-16 on the ruling.

Amendment Offered by Rep. Doggett

Doggett introduced his amendment, which would restore the AMT that H.R. 1 repeals. He explained that the Paradise Papers have shown corporations and individuals “stash their millions in offshore tax havens,” and referred to H.R. 1 as a “$157 billion gift to multinational tax dodgers.” Neal supported the amendment, stating that the AMT is “particularly important” and only a small number of taxpayers are subject to it. Kind also voiced his support.

Paulsen stressed that the AMT repeal should be one of the committee’s priorities, calling it an “unfair burden” on “honest taxpayers who are far from wealthy.” Roskam also opposed the amendment.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Levin

Levin explained that his amendment is the same as the 2015 introduced legislation that would “plug” the carried interest loophole, where capital gains tax would be paid rather than a regular tax, stating that the loophole shows the “failure of the system.” Kind supported the amendment.

Holding voiced his opposition to the amendment, explaining that carried interest “rewards entrepreneurism,” encourages long-term investment, and creates jobs, wealth, and economic growth.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Lewis

Lewis introduced his amendment, which would delay the tax cut until American armed forces have withdrawn from wars and there is no longer a federal deficit.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Blumenauer

Blumenauer introduced his amendment, which would reinstate tax credits for wind energy projects. Blumenauer noted the wind energy industry now employs more than 100,000 Americans in all 50 states, and renewable energy overall employs more people than gas, oil, and coal, and repealing the wind energy tax credits jeopardize jobs and investment. Democrats also supporting the amendment included Reps. Neal, Doggett, Levin, Crowley, and Larson.

Marchant spoke in opposition to the amendment, stating the wind production credit carries too much risk and abuse. Reps. Brady, Reed, Schweikert, and Meehan also spoke in opposition to the amendment.

The amendment was not agreed to in a 15-22 vote.

Amendment Offered by Rep. Sewell

Sewell introduced her amendment, which would restore and expand the historic tax credit. Sewell called the credit a “key redevelopment tool” for revitalizing towns and cities by encouraging private sector investment in the rehabilitation and reuse of historic buildings. Democrats also in support of the amendment were Reps. Neal, Higgins, Lewis, Doggett, and Davis.

Nunes spoke in opposition to the amendment, stating the American people cannot have lower tax rates if there are continued “special deals” in the tax code. Tiberi also spoke in opposition.

The amendment was withdrawn in advance of votes.

Amendment Offered by Rep. Chu

Chu introduced her amendment, which reverses the repeal of the estate tax. Chu stated repealing the estate tax helps the “wealthiest of the wealthy,” only affecting estates of more than $5.5 million, or $11 for a married couple. Chu explained that only 0.2 percent of all estates in the country would pay the estate tax, and only 80 farms are expected to pay the tax at the current rate. Democrats who spoke in support of the amendment were Reps. Levin, Crowley, Pascrell, Neal, and Larson.

Noem spoke in opposition to the amendment, calling it a “double tax” because families pay tax on their income, and then pay tax again “at the point of tragedy in a family.” Noem called the estate tax “fundamentally flawed.” Republicans who spoke in opposition to the amendment included Reps. Reichert, Jason Smith, Adrian Smith, Walorski, Paulsen, Kelly, Meehan, Rice, Bishop, Renacci, Curbello, Vern Buchanan (R-Fla.), Reed, and Brady.

The amendment was not agreed to in a 14-24 vote.

Amendment Offered by Rep. Kind

Kind introduced his amendment, which would preserve and strengthen Section 199, which is removed under H.R. 1. He stressed that Section 199 is “crucial” to passthrough businesses, and possibly the most important “tool” to them, adding that he has heard from farmers how devastating the removal would be. DelBene also voiced her support.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell introduced his amendment, which would only allow the tax bill to take effect once the Ways and Means Committee can review President Trump’s tax returns.

Renacci and Brady opposed the amendment, explaining that the Committee has never targeted an individual.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Brady

Brady introduced his manager’s amendment, which would preserve the Adoption Tax Credit, allow families to rollover 529 savings plans into an Achieving a Better Life Experience (ABLE) account, help military families with moving expenses, provide a new, low, tax rate for businesses earning less than $75,000 in income, and a new nine percent rate for small businesses. He continued that it refines international tax reforms, adding that they are “tough but fair rules to prevent jobs from moving overseas.” Brady noted that there is still “much to do” on the international side of the IRC, and that they will continue to look at insurance provisions in the original bill going forward.

Republicans supported the amendment and the overall bill, applauding the reduction in taxes and other provisions, including Reps. Roskam, Nunes, Black, Buchanan, Reed, Kelly, Holding, and Marchant.

Neal opposed the amendment, stating that over the course of four days, not a single Democratic amendment was agreed to, and that there is a “legitimate argument about international competition that needs to be addressed.”

Other Democrats voiced their opposition to the amendment, criticizing the process over the last few days, including Reps. Lewis, Doggett, Levin, Thompson, Crowley, Davis, Blumenauer, Sanchez, and Higgins.

The amendment was agreed to in a 24-16 vote.

Final Vote
H.R. 1 was voted favorably to the House in a 24-16 party-line vote.

For more information on this markup, please click here.