NY Times: Washington Prepares For The ‘Super Bowl Of Tax’

New York Times, Washington Prepares for the ‘Super Bowl of Tax’:

President Biden’s decision not to seek re-election is upending expectations about who will control Washington next year. But there is one thing lawmakers and lobbyists are certain of: A tax fight is coming.

Across the nation’s capital, preparations are quietly starting for what some are calling the “Super Bowl of tax.” On Capitol Hill, Republicans and Democrats are holding strategy and education sessions. Lobbyists are pressing their case to lawmakers and preparing multimillion-dollar publicity campaigns to defend tax breaks for corporations. Think tanks are churning out research assailing or lauding elements of the byzantine tax code.

On the line is the future of the Tax Cuts and Jobs Act, which a Republican Congress passed and former President Donald J. Trump signed into law in 2017.

To avoid blowing too large of a hole in the federal budget at the time, Republicans scheduled many of the tax cuts to expire after 2025. That deadline has created a rare opportunity to reshape federal tax policy next year, and lawmakers in each party intend to be ready to wield whatever power voters give them in November. ...

Many of the expiring tax measures are ones that benefit middle-class Americans, including a larger standard deduction, lower marginal income tax rates and a more generous child tax credit. Republicans chose to let those tax cuts expire — while making other measures like a lower 21 percent corporate rate permanent — in a bet that Democrats would eventually vote to protect them.

Their political logic has so far borne out. Many Democrats favor extending the tax cuts for most Americans: Vice President Kamala Harris supports Mr. Biden’s call not to raise taxes on households making less than $400,000 per year, according to a Harris campaign aide. Mr. Trump and many Republicans want to extend all of the tax cuts — and potentially cut taxes further.

Republicans are considering whether they would try to pay for extending the 2017 tax cuts, which would cost the federal government roughly $4 trillion in lost revenue over a decade, according to estimates from the nonpartisan Congressional Budget Office. Some Republicans have said they could vote to raise taxes on corporations, a suggestion that runs counter to Mr. Trump’s desire to cut the corporate tax rate again if he is re-elected.

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