When Sen. Chuck Grassley (R-Iowa) was confirmed as chair of the U.S. Senate Committee on Finance this past January, he identified his priorities for the 116th Congress as improving trade, tax, and health care. Since then, though, competing priorities have emerged in the committee – in particular, green energy and paid family leave.
Senate Finance Committee members from both sides of the aisle spoke about the issues most important to them at the Bloomberg Tax & Accounting Leadership Forum, which took place on Nov. 19, 2019, at the Newseum in Washington, D.C.
For ranking member Sen. Ron Wyden (D-Oregon), a major concern is establishing equitable wealth taxes.
“This is the first time in a long time we’re going to have a real conversation about taxes,” he said of the upcoming election. “This is a debate that’s long overdue. For me, the debate starts with the fact that there are two tax systems in America.”
Wyden’s proposed “mark-to-market” capital gains tax reform, he said, would close the loophole that allows America’s wealthiest citizens, who earn money primarily on investments, to defer paying taxes almost indefinitely – unlike salaried workers who are taxed on every paycheck.
“I want one tax system for everyone,” Wyden said, pointing to concerns that people who make $100 million in capital gains are able to avoid paying anything at all into Social Security, and that his priority is working toward collecting these taxes owed before considering future tax reform.
“I’ve talked to a number of my colleagues, and there’s a lot of interest,” he said. “There’s an awareness that there’s two tax systems. They’re struck by how dramatic the implications are.”
Across the aisle, Sen. Bill Cassidy (R-LA) spoke about the importance of equitable paid family leave, which he proposed this past summer with Sen. Kyrsten Sinema (D-AZ) as the Cassidy-Sinema plan. Under that plan, families would receive a larger tax credit the year a child is born and then a smaller tax credit for the subsequent 10 years.
“It’s a little diminution of their future benefit, but it pulls it forward,” he said, adding that encouraging parents to remain in the workplace and therefore grow their salaries will counteract the reduction in that future benefit.
Both Sens. Wyden and Cassidy spoke about the Green New Deal in strong – but divisive – terms.
“What I’ll do if I have the chance in January 2021 is throw the 44 [existing] tax provisions on energy in the garbage can,” Wyden said. “Those provisions are a monument to yesteryear. Instead of the 44, we’ll have one for clean energy, one for clean transportation fuel, and one for energy efficiency.”
While Cassidy conceded that we’re trending toward a lower-carbon future, he voiced concerns about a severe lack in parity between what the two parties are proposing.
“If one side is asking for the Green New Deal, which is about $16 trillion in mandatory spending … and the other side is asking for something relatively modest, then things won’t get through,” Cassidy said. “They’re speaking of such large sums of money that you lose symmetry between what two sides of the aisle are asking. I think for us to get a deal, there has to be some symmetry.”