Senate Finance Committee Debates Tax Reform

At a U.S. Senate Finance Committee (the "Committee") hearing, Committee leaders and industry experts debated recommendations for individual tax reform.

Committee Chair Orrin Hatch (R-UT) criticized Democrats for efforts that he said have been made to block Republican attempts to develop a bill. He characterized the Democrats' request for a series of process demands as "unreasonable," and expressed hope that Democrats would abandon such demands to work towards finding "common ground." Senator Hatch also rejected speculation that Republicans are drafting a "secret tax reform bill," and said that a bill will be written by a group of tax-writing committees. Republican efforts, Senator Hatch vowed, will be "focused squarely" on facilitating relief for middle-income taxpayers. He backed several potential changes, including expanding the standard deduction and increasing and enhancing the child tax credit, as well as other efforts to simplify the tax code.

Committee Ranking Member Ron Wyden (D-OR) argued that the details of Republican tax plans do not line up with the stated goals to help the middle class. Senator Wyden claimed that President Trump declared there would be "no breaks for the wealthy," yet supports a pass-through proposal that would function as a "scheme for the wealthy to dodge paying their taxes." He asserted that middle- and lower-income earners are forced to adhere to a "strict set of rules" while "there's another set of rules for the most fortunate." Senator Wyden objected to plans that would remove state and local tax deductions ("SALT"). Republican tax reform, Senator Wyden suggested, would "gore" middle-class earnings to facilitate further breaks for wealthy Americans.

New York University School of Law Professor Lily L. Batchelder contended that any tax reforms should enhance progressivity. She advocated for expanded tax...