A White House briefing and other good stuff

Posted on October, 10 2017, 08:34

Last week, the White House held a meeting last week with officials of organizations that Administration officials are relying on to help promote the tax reform package.  I was invited to participate and it provided some excellent information.  Some of which I was aware of and have relayed to you in my previous columns.  Some of which was legislatively technical.
For example, we knew that passage of the Budget was necessary for passage of a tax reform.   This puts pressure on Senate Majority Leader McConnell to get a majority of the Senate to pass it.  There seems to be hope that one or more Democrat Senators will support the budget.  Of course, the big problem is convincing recalcitrant GOP Senators to support any tax reform proposal.   Most people still believe that McCain will be a "no" vote.  Senator Susan Collins (R-ME) and Senator Rand Paul are crucial votes and there is still hope they will vote for tax reform.  These two Republicans could conceivably kill tax reform. 
The "cost" of any tax reform bill still depends on the "score" of the bill.   Enigmatically, the House uses a different scoring method than the Senate does.  That means that for identical provisions, the Senate will regard the "cost" of any provision to be much higher than the House.  It is more likely that a given tax provision -- such as the Death Tax repeal -- will be considered in the Senate as a major revenue loser, which the House may consider it as a long-term revenue raiser. 
The second important factor which has become evident prior to the White House meeting was the fact that the Budget will likely mean that not all of the tax reform proposals passed by the House and Senate will be passed as permanent changes to the Tax Code.  This means that some tax changes will "sunset" after ten years.  It is clear that there is a major struggle going on.  Which tax changes would be included in the "permanent" categories and which in the ten-year "sunset" period.  You can see the job we have on our hands at this point.
At another strategy meeting last week, we discussed the fact that the Trump Treasury Department formally announced rescinding the Obama Treasury proposed regulations under Section 2407 which would eliminate your ability to restructure your estate to reduce Death Tax liability.  One Trump Treasury official called the proposal an attempted $18 billion "money grab."  In other words, Obama's proposed Obama IRS rules would have effectively doubled the revenues from the Death Tax. 
A friend of mine has told me an anecdote which reminded me of a story I heard about the Reagan Presidency.  In Reagan's incumbency, he was meeting with his staff and they reported that in the initial draft of the speech he was to give at the Berlin Wall, was the statement, "Mr. Gorbachev, tear down this wall."  The State Department was against including that statement.  Others were against the inclusion of that statement.  In his conference with his speechwriting staff, Reagan said, "That stays in."
My friend tells me that at a recent meeting with President Trump and his speechwriters the discussion was about a line in a speech regarding a call for repeal of the Death Tax.  It was noted that major media were highly critical and most or all of Democratic party leaders have attacked the proposed repeal.  President Trump reacted with the Reaganesque, "Death Tax repeal stays in."  
A final note on the unpredictability of today's Washington.  It is clear that President Trump is going to go on the road to generate support for Tax reform.  That is great news.  What remains to be seen is whether the President can work to effect the needed votes among the conservative Freedom Caucus, and the wild-card Republican Senators Susan Collins and Rand Paul.