23-06-2025
All eyes on the parliamentarian
Presented by The American Council of Life Insurers
TIME FOR MORE FUN: Welcome to merely the latest of the crucial weeks for the GOP megabill.
Republican leaders in the Senate hope to release the full text of the fiscal package as soon as today, with the ultimate goal to move the measure to the floor perhaps by Wednesday or Thursday.
That means there is a lot that still needs to be accomplished over the next couple days.
Bipartisan meetings with the Senate parliamentarian over the Finance Committee's proposals — basically the meat of the megabill — kick off today. The parliamentarian's overall work of advising whether provisions are allowed under the Senate's strict budget rules could be finished as soon as Tuesday. (That might make it more likely that floor consideration of the package is pushed back until Thursday.)
On the parliamentarian: Democrats have gotten some key parts of the megabill tossed, particularly from the Agriculture Committee's jurisdiction.
Still, it's not clear how much success Democrats will have on the tax front. This will be the first time the parliamentarian considers Finance Committee proposals under a current policy baseline, which could add some further curveballs to what's known as the Byrd Bath process.
But it's worth remembering: The parliamentarian cleared the vast majority of provisions from the original Trump tax cuts, which was passed back in 2017.
In fact, perhaps the most famous portion of the bill that got struck was its name, though lots of people still refer to it as the Tax Cuts and Jobs Act. (A more substantive provision that would have given churches and nonprofits increased leeway to dabble in politics was also tossed out.)
MORE ON EVERYTHING in a bit.
An exciting time for people of a certain age: Today marks 34 years since the North American release of a little game called 'Sonic the Hedgehog' on the Sega Genesis platform.
Get us those scoops at supersonic speed.
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LOOK AT ALL THOSE NUMBERS: The analysts at JCT really pushed to get out their latest projections on the Senate tax bill, given that they released them in the dead of night on Saturday.
The current policy baseline — which finds that it costs nothing to extend the expiring parts of the Trump tax cuts — threw some curveballs here too, as our Benjamin Guggenheim noted.
JCT found that the Senate GOP tax bill would cost around $441 billion under that approach. But that doesn't tell the whole story, as a number of outside budget analysts were quick to point out.
Senate Republicans' tax bill would almost certainly cost north of $4 trillion under the current law baseline that the House used and that has been traditional in congressional budget measures. (We'll know more soon enough: JCT is expected to release a score of the Senate tax bill based on the current law baseline in the coming days.)
The different baselines make it harder to do a direct comparison between the House and Senate tax bills. But there are still plenty of numbers that stuck out in JCT's latest findings:
— Remember all that talk from Senate Republicans about removing or paring back President Donald Trump's preferred tax policies from the megabill?
In the end, the Senate didn't squeeze out too much in extra savings there compared to the House. GOP senators proposed north of $240 billion in tax cuts over a decade based on Trump's campaign proposals, compared to just under $290 billion in the House.
Long story short: The Senate rolled back the cost of eliminating tax on overtime pay and for auto loan interest quite a bit, and also reduced the scope of 'no tax on tips.' But GOP senators also expanded the proposed deduction for seniors.
—A big reason Senate Republicans thought about clipping Trump's campaign proposals was to help make a trio of key business incentive permanent, after the House restored those preferences only through 2029.
They were able to do so anyway, but at a cost of around $420 billion over a decade, according to JCT. Arguably, the real cost is even more, because part of the proposal to allow full expensing for capital investments is covered under the current policy baseline.
The House's temporary proposals for those three incentives — the other two are immediate deductions for research costs and a more generous write-off for the interest on companies' debt — cost less than a $100 billion over 10 years.
—Senate Republicans significantly reduced the size of several of the House GOP's preferred revenue-raisers.
The so-called 'revenge tax' would cost $52 billion under the Senate plan, well under half the $116 billion that would be raised by the House proposal.
And GOP senators basically defanged the House's proposed tax increases on college endowments and overseas remittances, which raise around $4 billion and $1 billion, respectively, under their plan. The House's remittance proposal, for instance, generated around $26 billion in revenue.
CONFIRMING THEIR PRIORS: Senate Republicans also pulled back on the House GOP's proposed expansion of the special deduction for pass-through income from 20 percent to 23 percent.
Even so, GOP senators want to permanently extend the deduction, which they first put into place in TCJA — underscoring the policy's broad popularity among Republicans.
Sen. Elizabeth Warren (D-Mass.) recently asked JCT for further data on that incentive last week, as Democrats continue to argue that, among other things, far too many of the benefits from the deduction flow to the rich.
Among the joint tax committee's findings: That a large and growing share of the proceeds from the deduction are going to the well off.
Around 55 percent of the benefits for the pass-through write-off in 2022 went to taxpayers with an adjusted gross income north of $1 million — compared to 46 percent in 2018, the provision's first year in effect.
Those making more than $10 million a year got a full one-fifth of the tax cut from the deduction in 2022, with those earning north of $50 million got 8 percent. That compares to 13 percent and 4 percent, respectively, in 2018.
And to be clear: That's a growing share of a growing tax break. JCT noted that just under 19 million taxpayers claimed the deduction in 2018, leading to reduced tax liabilities of almost $43 billion. Seven million more taxpayers claimed the deduction four years later, at a cost of an extra $20 billion.
The broader view: A range of analyses have found that the GOP megabill is regressive, with the wealthiest gaining far more than those at the bottom end of the income scale.
The Yale Budget Lab recently released more on that front, with a side-by-side analysis of the House and Senate tax packages. The group noted that central parts of the tax bill make it more regressive, like the extension of the temporary TCJA provisions.
Low-income taxpayers also don't benefit much from Trump's campaign proposals or the GOP expansion of the Child Tax Credit. But how Republicans decide to handle deductions for state and local taxes will influence distributional aspects as well.
The $10,000 placeholder currently in the Senate bill is far more progressive than the $40,000 cap that passed the House. 'What the distribution ultimately looks like is going to meaningfully be determined by where lawmakers land on questions like the SALT cap, which is one of the large outstanding areas of difference between the chambers,' said Natasha Sarin of the Budget Lab.
Ginning up the opposition: A pair of progressive organizations, Fair Share America and Unrig Our Economy, kicked off a bus tour this weekend as they try to put more of a spotlight on the megabill.
Polls continue to show voters generally aren't on board with the GOP fiscal package, though some individual parts of it are popular. The progressive bus tour kicked off in the Northeast over the weekend and will travel around 4,000 miles through 14 states before coming to a close in mid-July.
The White House and GOP lawmakers have gotten the megabill to within shouting distance of Trump's desk, despite a very narrow majority in the House and key differences between centrists and conservatives about the package.
Still, groups on the left believe their work on the bill can have an impact.
'We've seen firsthand that once people learn what is in this harmful tax and budget bill, they strongly oppose it,' said Kristen Crowell of Fair Share America. 'When they turn out and demonstrate their opposition, or call or write their member of Congress, that makes a difference.'
Around the World
Financial Times: 'Inheritance tax referendum spooks Swiss super-rich.'
Reuters: 'Italy delays again contested tax on sweetened drinks to 2026.'
Cruise Industry News: 'Greece to Introduce Tax for Cruise Guests Starting in July.'
AROUND THE NATION
'Why the sin tax has failed to keep up with Cleveland's stadium and arena 'needs.''
Salem Statesman Journal: 'Bill to increase Oregon's hotel tax to pay for wildlife programs passes House.'
Springfield News-Leader: 'A special session bill offers property tax relief for some Missouri counties — but not all.'
Also Worth Your Time
Wall Street Journal: 'The Tax Bill Would Deliver a Big Win for Private Schools—and Investors.'
Washington Post: 'Trump and GOP's tax bill would sell off USPS's brand-new EVs.'
Bloomberg Tax: 'EU Businesses Call for Quick Solutions to US 'Revenge Tax.''
Did you know?
The 'Sonic the Hedgehog' movie was the sixth-highest grossing film of 2020.
