Republicans’ tax-rewrite plans are riddled with bugs, loopholes and other potential problems that could plague lawmakers long after their legislation is signed into law.
Reports monitored on einnews.com quoted some law experts as saying that some of the provisions could be easily gamed and described plans to cut taxes on “pass-through” businesses in particular could open broad avenues for tax avoidance.
Other lapses identified in the implementation of the tax plans include the likelihood that the measures would have unintended results, like a last-minute decision by the Senate to keep the alternative minimum tax, which was designed to make sure wealthy people and corporations don’t escape taxes altogether.
This is even as the lawyers were certain that for many businesses, that would nullify the value of a hugely popular break for research and development expenses.
“Some provisions are so vaguely written they leave experts scratching their heads, like a proposal to begin taxing the investment earnings of rich private universities’ endowments. The legislation doesn’t explain what’s considered an endowment, and some colleges have more than 1,000 accounts.
“In many cases, Republicans are giving taxpayers little time to adjust to sometimes major changes in policy. An entirely new international tax regime, one experts are still trying to parse, would go into effect Jan. 1, only days after lawmakers hope to push the plan through Congress”, the online medium stated.
A former top tax official in George W. Bush’s Treasury Department, Greg Jenner, was reported to have said that “the more you read, the more you go, ‘Holy crap, what’s this? We will be dealing with unintended consequences for months to come because the bill is moving too fast.”
Some liken it to when Democrats rushed the Affordable Care Act through Congress and ended up with scads of legislative snafus. Republicans have not allowed Democrats to fix the health care law, and some say the GOP can expect payback when it tries to address problems with its tax plan.
In his remarks, House Ways and Means Chairman Kevin Brady (R-Texas) said he was aware of problems, and that lawmakers aim to address them as part of negotiations over a final plan.
“We’ve gotten really good feedback on how best to fine-tune it. It’s really showing us where we need to land, and the issues we need to improve in conference.”, Brady said
The report added that some tax veterans believe that part of writing any tax legislation is trying to anticipate how clever tax lawyers might game a proposal, how seemingly disparate sections of the code might interact in unexpected ways and how to address taxpayers’ sometimes unusual circumstances.
According to them, it is not possible for lawmakers to foresee every eventuality, and it is hardly unusual for there to be mistakes Congress later corrects.
The report stated that “what is unusual is the sheer scope of the legislation now before lawmakers, and the speed with which it is moving through Congress, adding that Republicans are trying to muscle the plan through the Capitol before special interest groups can mobilize opposition.
This is just as it also noted that the House passed its draft of the proposal, from introduction to final vote, in two weeks flat and that normally balky Senate needed barely three weeks to move its plan.
The report stated further that by comparison, it took Democrats more than six months to pass the Affordable Care Act.