Heres Where the GOP Tax Bill Stands Right Now - Bloomberg

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Heres Where the GOP Tax Bill Stands Right

Now
Bloomberg News
November 06, 2017 8:52 AM
Updated on
November 06, 2017 10:28 AM

Tax Bill Process Is Weeks, Not Days, Says Marc Short

Tax Bill Process Is Weeks, Not Days, Says Marc Short

The Houses tax-writing committee began four days of work to hammer out the Republican tax
plan Monday afternoon in Washington. Heres the latest on the decisions:

https://www.bloomberg.com/news/articles/2017-11-06/house-tax-chief-targets-carried-interest-in-bill-state-of-play[11/6/2017 11:00:56 AM]

Heres Where the GOP Tax Bill Stands Right Now - Bloomberg

House Tax Chief Says Bill Hits Special Interests

House Ways and Means Chairman Kevin Brady told his panel it faces a monumental challenge
this week: coming together to fx a tax code that has become just as broken, complex and unfair
as the one President Reagan and Congress overhauled in 1986.

In his opening statement, Brady said the bill, which would cut tax rates for corporations and
certain closely held businesses as well as for individuals, would spur economic growth. He said
that by removing breaks for special interests, the bill would make the tax system fairer for all.

This is liberation from high tax rates that punish hardworking Americans while Washington
special interests get a pass, Brady said. The bill would end a tax system that is by special
interests, of special interests and for special interests, he said.

He added that although members had requests that werent ultimately included in the tax
legislation, I can assure you this is not the last tax markup our committee will ever hold.

Representative Richard Neal, the panels top Democrat, cited concerns over the bills proposals
related to companies offshore profts, and changes to deductions for mortgage interest and
medical expenses.

The legislation, which was crafted solely by the majority party behind closed doors and which
was not made public until late last week, puts the wealthy and well-connected frst, while forcing
millions of American families to watch as their taxes go up, Neal said. -- Sahil Kapur

House Panels Speed on Tax Bill Irks Democrats (12:06 p.m.)

Democrats called for slowing down the House Ways and Means Committees consideration of its
tax bill -- saying lawmakers need to consider the legislations provisions for stemming tax
avoidance.

We gather at noon today, said Representative Lloyd Doggett, a Democrat on the Ways and
Means panel. Yet there have been less than 100 hours of evaluation of the bill, he said.

On Sunday, an international journalism group published reports that alleged tax avoidance by
U.S. multinational companies including Apple Inc. The reports, based on documents obtained
from an offshore law frm, also linked high-ranking offcials in President Donald Trumps

https://www.bloomberg.com/news/articles/2017-11-06/house-tax-chief-targets-carried-interest-in-bill-state-of-play[11/6/2017 11:00:56 AM]

Heres Where the GOP Tax Bill Stands Right Now - Bloomberg

administration to holdings in offshore tax havens such as the Cayman Islands and Bermuda.

Democrats and tax-advocacy groups have called for delaying consideration of the tax bill
pending more disclosures. On Monday, a pair of Democratic senators said the bill would do too
little to stem aggressive tax avoidance.

If you deduct medical expenses or student loan interest from your taxable income, the
Republican plan comes after your wallet, Democratic Senators Chuck Schumer and Ron Wyden
said in a joint statement. But if you stash your billions in secret bank accounts overseas, their
plan gives you the green light to keep doing what youve been doing.

Schumer is the Senate minority leader. Wyden is the top Democrat on the tax-writing Senate
Finance Committee. -- Lynnley Browning and Sahil Kapur

House Tax Chief Targets Carried Interest (10:08 a.m.)

The carried interest tax break that provides an advantage for investment managers would be
revised under changes the Houses chief tax writer says hes planning.

House Ways and Means Chairman Kevin Brady said on CNBC Monday morning that he intends
to attach a two-year holding period to carried interest. The tax break is used widely among
private-equity managers, venture capitalists, certain real estate investors and hedge fund
managers.

Carried interest is the portion of an investment

funds proft -- usually a 20 percent share -- that is paid to investment managers. Currently, tax
authorities treat that income as capital gains, making it eligible for a tax rate as low as 23.8
percent -- on gains from assets held for a year or more. The top tax rate for ordinary income is
39.6 percent. The change Bradys proposing would double the length of time an asset would
have to be held to qualify for the lower rate.

We will put in the two-year holding period on carried interest to make sure its really focused
on those long-term, traditional real estate partnerships, Brady said on CNBC.

A group that represents private equity funds said that making the change would put economic
growth at risk. Alterations to the treatment of carried interest -- and all other capital gains --
discourages investment and jeopardizes economic growth, Mike Sommers, the chief executive
offcer of private equity industry group the American Investment Council, said in an emailed
statement.

President Donald Trump had made an issue of the special tax beneft during his presidential

https://www.bloomberg.com/news/articles/2017-11-06/house-tax-chief-targets-carried-interest-in-bill-state-of-play[11/6/2017 11:00:56 AM]

Heres Where the GOP Tax Bill Stands Right Now - Bloomberg

campaign. He labeled some hedge fund managers as paper pushers, who are getting away
with murder.

Many hedge funds dont beneft from the tax break. Thats because many hedge funds hold
assets for a short period of time -- especially those that use computer-driven strategies to buy
and sell securities thousands of times a day. Hedge funds could still get the break under the
change if they held assets for two years or more before selling. -- John Voskuhl and Melissa
Mittelman

With assistance by Sahil Kapur

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