The Games They Will Play: An Update on the Conference Committee Tax Bill

Abstract

Earlier this month, we posted a report identifying key weaknesses in the Senate and House tax legislation, titled the Tax Cuts and Jobs Act (TCJA). Based on the conference bill released last week, this report updates our analysis describing some of the major games, legal roadblocks, and glitches in the legislation. This represents the continued work of a group of legal experts from across the country. Unfortunately, while the conference bill addressed some of the issues we described in our earlier report, others were made worse, and the bill introduces fundamental—and in our view insurmountable—structural problems to the income tax. Thus, the legislation is still likely to cost more than the current estimates of over $1 trillion, to advantage the well-advised (and their advisors) playing tax games in ways that are both deliberate and inadvertent, and to face legal roadblocks like WTO non-compliance that could undermine key components of the legislation. Finally, the bill still has glitches that could lead to haphazard and unexpected results that could arbitrarily favor or penalize taxpayers.