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House GOP Releases Tax Priorities Amid Fitful Talks on Stimulus

Posted on Oct. 13, 2020

House Ways and Means Committee Republicans have introduced a bill that highlights a compilation of tax proposals they intend to target in the future as negotiations over the next pandemic relief package remain mired in confusion. 

The Commitment to American Growth, Renewal, and Opportunities for Workers, Technology, and Health (GROWTH) Act (H.R. 11), which combines proposals from various GOP Ways and Means Committee members into one package, aims to boost American innovation and grow the economy, according to committee ranking member Kevin Brady, R-Texas. 

President Trump proved that through low taxes and balanced regulation, we can grow jobs and paychecks,” Brady said in an October 9 release.

Not all the provisions in the bill are solely Republican ideas. One measure would allow for immediate research and development expensing by repealing the requirement to amortize costs beginning in 2022 as implemented by the Tax Cuts and Jobs Act. The proposal was introduced by Ways and Means Committee members John B. Larson, D-Conn., and Ron Estes, R-Kan., in September 2019 in an effort to spur investment in the United States. 

The TCJA changed the rules by preventing companies from immediately expensing R&D costs. Instead, companies will have to capitalize and amortize costs over a five-year period starting after December 31, 2021, when the law becomes effective. 

Another bipartisan measure included in the GROWTH Act would see the R&D tax credit doubled. While the language adopted in the bill mirrors that of H.R. 7766, introduced by Ways and Means Committee member Jackie Walorski, R-Ind., similar measures have the support of Democrats, including Senate Finance Committee member Maggie Hassan, D-N.H., who introduced a bill (S. 2207) to expand the credit for new small businesses in 2019 along with Sen. Thom Tillis, R-N.C. 

Brady also said the bill would encourage domestic manufacturers of medicines and medical devices to help the country deal with the next pandemic and not rely on overseas products. The measure would provide a 30 percent tax credit for new investments in advanced manufacturing equipment or machinery used in the United States to manufacture medicines and medical devices.

However, the bill is unlikely to receive much attention from Democrats and won't be part of current negotiations for a COVID-19 relief package to help stimulate the economy. 

Stop-and-Go Negotiations

Meanwhile, coronavirus relief negotiations between Democrats and the Trump administration remained stuck despite near-daily conversations between House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin.

The lack of clarity surrounding the situation is confounded by President Trump's shifting positions. Trump initially said he wanted Mnuchin to walk away from the table because Democrats were demanding too much. His position changed to supporting a “skinny” bill that would extend the Paycheck Protection Program, include funds for the airline industry, and provide taxpayers with economic impact payments. 

In an October 9 tweet, the president appeared to instruct Mnuchin and Republicans to back a big bill that could bridge the gap between the $1.6 billion the administration was willing to concede to and the $2.4 billion Democrats want. The president said later October 9 on Rush Limbaugh’s talk radio show that he wants to “see a bigger stimulus package, frankly, than either the Democrats or Republicans are offering.” 

A bigger bill would likely upset many Senate Republicans, including Ron Johnson, R-Wis., and Finance Committee member Ben Sasse, R-Neb., who don’t want to spend more on a stimulus package amid signs that the economy is improving.

Senate Majority Leader Mitch McConnell, R-Ky., told local reporters in Kentucky that a package is “unlikely in the next three weeks.”

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