Tax Reform: Watch This Space…
Last week, the Senate adopted a budget for the next fiscal year. Once House and Senate leaders work out their differences, and a final budget is passed by the House (which they appear to be voting on this Thursday) this would clear the way for prompt movement on the GOP-backed tax reform measure. This is because the budget resolution will include reconciliation instructions that will allow a tax bill to pass with only 51 votes in the Senate instead of the usual 60. Needless to say, the White House is pushing hard for things to play out this way so that it can notch a much-needed win on tax reform.
The Alliance is expecting a tax reform bill to be introduced in the House Ways and Means Committee within the next two weeks, with the Senate Finance Committee beginning its work in November. At this point, we expect the bill to closely parallel the key points in the GOP plan released earlier this month. This would include lower taxes on corporate profits, fewer and lower individual income tax brackets, the elimination of the estate tax, and possible limitation on the deductions such as mortgage interest and state and local taxes. The administration’s goal is to have the House clear a tax bill as early as Thanksgiving to pass it on to the Senate to pass a final bill by the end of the year.
After the Alliance’s recent meetings with Congressional and Senate staff members on Capitol Hill, we are not expecting the legislation to contain any significant tax reform provisions that would impact 501(c)(8) fraternals, or any other organizations within the 501(c) section of the Tax Code. Nonetheless, the devil is in the details and Alliance staff and federal advocacy counsel will closely review any tax reform legislation to determine its impact on fraternals.
Should there be a provision in the legislation that has the potential to undermine the fraternal tax exemption, we will notify the leaders of Alliance member societies immediately and ask them to contact Members of Congress to express our concerns. Likewise, we will alert member societies about any discussions, negotiations or amendments to the legislation that are discussed during the course of hearings or mark-ups on the bill that could impact the fraternal exemption.
While there is no need to take any action now, we want to stress the need for every member society to be ready to make a call or send an email to legislators on the issue and to quickly mobilize their societies’ employees, field representatives, local chapter leaders, and individual members to do the same.
This should be interesting and we will see how these tax reform discussions go but rest assured that Alliance staff and our federal advocacy counsel are closely monitoring the situation. Please contact me if you have any questions or need more information about the tax reform debate.
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