- Jonathan Swan
- Nov 1
The biggest problem in the GOP tax plan
House Ways and Means Chairman Kevin Brady. Photo: Alex Brandon / AP
Republican House members tell me that the most politically explosive issue, by far, in the tax plan to be released tomorrow is the over-complicated treatment of "pass-through entities" (often small businesses that report business income on personal returns). Some influential Republican House members are saying final language on the tax bill's treatment of those situations will disadvantage some small firms and could imperil GOP support for the plan.
"This is supposed to be a simplification. It's not," a House GOP member told me. "It's going to be the most explosive thing once members hear about it."
Why this matters: Pass-through entities — many of which are small businesses — are a big faction of Republican supporters. The White House and House leadership knows this provision will be problematic with some members.
Other things I can confirm:
- The House tax bill will not repeal the individual Obamacare mandate, even though it would bank them a good chunk of change and even though President Trump called for it today.
- Corporate rate cut to 20 percent will be permanent, even though the Ways and Means Committee flirted with making the corporate cuts temporary. (That would've been a big political problem.)
- The expansion of the child tax credit — an Ivanka Trump priority — made it into the bill.
- The bill repeals the estate tax — though it's phased in.
- And after much angst, Republican tax-writers have decided there's too much political pain in meddling with 401k retirement benefits.