Tax Deal?

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💰 Tea leaves show path to possible tax deal

As they make their opening bids for tax reform this congressional session, House and Senate tax writers are staking out maximalist positions.

• They're also clearly leaving space to cut a deal, Axios' Hans Nichols reports.

Why it matters: A bipartisan tax negotiation will test a divided Congress’ ability to move substantive legislation in a post-debt deal world. It will also be a venue for both parties to signal their priorities to their bases and the general public ahead of the election.

Driving the news: The House Ways and Means Committee passed legislation yesterday that would expand the standard deduction and allow businesses to write off more of their research and development expenses as well as their capital expenditures.

• Republicans want to seize on the broad consensus that Congress needs to restore the R&D expensing that expired in 2021. They also have other cuts, which would cost an estimated $240 billion, and want to claw back some $216 billion from Biden's green energy tax breaks.
• Democrats are looking for a way to make some form of the enhanced child tax credit — which was included in Biden's 2020 stimulus for one year — permanent.

What they're saying: "There's a growing sense on both sides of the aisle that we've got to get it done," said Sen. Thom Tillis (R-N.C.).

• "I don’t specifically know what the outline of a deal may be,” said Sen. Chris Coons (D-Del.). "But I see an environment where the odds that a deal could move forward are better than it's been in several years.”

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