BNA: Multinationals Wary of Minimum Tax in Republican Framework

I spoke to Laura Davison from Bloomberg BNA about the international provisions in the GOP tax plan and the broader need for an orderly transition to the new system:

Another central focus among companies is how to transition to a new system, Liam Donovan, a lobbyist at Bracewell LLP, told Bloomberg Tax.

“If that’s what we are going to do, how are we going to get from A to C? What’s the in-between step?” Donovan asked. “Those decisions need to be made based on current law,” he said. “How do we grandfather things to not create disruption and uncertainty?”

Read the full piece here.

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BNA: Passthrough Gaming Solution Eludes GOP as Tax Bill Release Nears

I spoke to Laura Davison from Bloomberg BNA about the GOP effort to craft a workable solution to provide the tax cuts to pass-through businesses that the framework calls for:

Considering how much a company pays in wages is a broader measure of the value of the business than just counting machinery and land, Liam Donovan, a lobbyist with Bracewell LLP, said. That could be one way of determining profits versus wages. The trick is also targeting enforcement on situations where there is more opportunity for abuse, such as family businesses where people have control over the company and their compensation levels, he said.

“70-30 is a non-starter for a lot of groups. That would be the quickest way to hit a snag in this plan,” Donovan said. “Congress is put in a tough spot of finding the least-bad solution.”

Read the full piece here.

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POLITICO: Tax Reform is Hard

I spoke with POLITICO‘s Bernie Becker about the difficulty of tax reform and the comments were spread between a couple different pieces.

First, the Morning Tax tipsheet:

But it’s also fair to point out that health care and tax reform don’t exactly present the same challenges, especially given how invested Republicans became in repealing Obamacare over the last seven-plus years. “You’ve traded that emotional complexity for substantive complexity,” Liam Donovan, a former top aide at the National Republican Senatorial Committee, said about switching from health to taxes. “Not to say health care isn’t complex, but there’s so many more moving parts in taxes.”

This was the main point I tried to impress. What tax reform lacks in sentimentality it makes up for in sheer complexity and parochial inertia. I’ve touched on this before– tax reform is hard.

I also had the honor of closing out Bernie and Rachel Bade’s obligatory #TRIH piece.

Meanwhile, the clock is ticking on tax reform. GOP insiders say they have approximately four months to pass a bill before the 2018 election season kicks into high gear in January or February. Passage after that becomes even more precarious, as vulnerable Republicans turn skittish about taking tough votes.

“Time’s the most precious commodity they have,” said Liam Donovan, a former top aide at the National Republican Senatorial Committee who is now legislative director for Associated Builders and Contractors.

Read the full article here.

Bottom line– bona fide tax reform is hard. It may seem more attractive than health care in the sense that nobody is accusing you of taking insurance away from tens of millions of people, but the interests are so entrenched and the financial stakes so high that the trade-offs require a great deal of trust and good faith, two things that are hardly in abundance on Capitol Hill at the moment. Basically Congress is trading health care Jenga for a tax revenue rubix cube. While it’s solvable, success will require coordination and cooperation beyond anything we’ve seen to date.

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