Home\Latest News\Congressional Republicans Moving Toward Tax Reform Negotiations

Congressional Republicans Moving Toward Tax Reform Negotiations

Date: October 06, 2017

This week, House and Senate Republicans continued legislative efforts to move toward completing a package of tax reforms with only Republican support by adopting a Fiscal Year 2018 Budget Resolution in both chambers containing specific budget reconciliation instructions.  The House of Representatives passed a budget resolution along party lines on Thursday, while the Senate Budget Committee passed its proposal Friday. Under the Budget Reconciliation process, a tax reform package could be enacted with only a simple majority of Senators supporting it, if both chambers adopt a Budget Resolution containing budget reconciliation instructions. Republicans are working toward adopting a tax reform package that would not need support from Democrats.

Two weeks ago, the Trump Administration and Congressional Republicans released a framework for a tax reform package that would reduce the corporate tax rate and eliminate several tax deductions, including, potentially, elimination of the deduction for investment income received from municipal bonds. The proposed framework lays out four key principles or goals that a final tax package would need to accomplish in order to win support from the Administration, including making the tax code simpler, fairer and easier to understand; providing middle-class tax relief; discouraging jobs from going overseas; and, repatriating trillions of corporate tax dollars to reinvest in the American economy.

According to a study released earlier this year by the Association of Metropolitan Water Agencies and the National Association of Clean Water Agencies, municipalities issued nearly $38 billion in municipal bonds for investments in water and wastewater infrastructure in 2016. The WateReuse Association is urging Congress to maintain the tax-exempt status for income earned on investments in municipal bonds and members are encouraged to reach out to their Congressional delegation to voice their support for maintaining the exemption.

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