Last week, House Budget Committee Chairman Jodey Arrington (R-TX), also a senior member of the Committee on Ways and Means, released a 50-page list of tax and spending policy options for House Republicans to consider as lawmakers craft a budget reconciliation bill to extend the Tax Cuts and Jobs Act (TCJA). The list, which includes many of the president's tax priorities and other options to provide tax relief and increase revenue, raises questions about its purpose, meaning, and potential influence on what Republicans in Congress will include. Let's look closer and try to separate the wheat from the chaff in this list of policy options.

The options range across the budget and fall under the jurisdictions of many committees — not just Ways and Means, but also Agriculture, Energy and Commerce, Education and the Workforce, Financial Services, and more. Obviously, the tax proposals, which include revenue estimates for each, are most important. They include several proposals on the deduction for state and local taxes (SALT) and lowering corporate tax rates, as well as the president's proposals to eliminate taxes on tips ($106 billion) and overtime pay ($750 billion), to provide tax relief to Americans working abroad ($100 billion), and to deduct consumer auto loan interest ($61 billion). 

Some of the corporate-related policy options on the Committee on the Budget's list include: 

• Eliminate Business SALT Deduction
• End Employee Retention Tax Credit
• Repeal Green Energy Tax Credits
• End Treatment of Meals and Lodging (Other than Military)
• Eliminate Employer Paid Transportation Benefits
• Eliminate Exclusion of Employer-Provided On-Site Gyms
• Federal Excise Tax on Federal Unions' Non-Representation Spending
• Make DEI Union Expenses Non-Deductible
• Increase Electric Vehicle Fees
• Border Adjustment Tax
• H.R. 5688, Improvements to Health Savings Accounts
• Replace HSAs with a $9,100 Roth-Style USA Indexed to Inflation
• Repeal IRA's Corporate Alternative Minimum Tax (CAMT)
• Repeal Amortization of R&D Expenses
• Implement Neutral Cost Recovery for Structures
• Repeal IRA's IRS Enforcement Funding

The budget options also include ideas that are easily dismissed as non-starters, if not red herrings, thrown in to name-check traditional GOP tax-cut orthodoxies or to brandish serious but seemingly impossible deficit reduction ideas. For example, repealing the home interest mortgage deduction would flood federal coffers with $1 trillion in new revenue over 10 years, but support for it in Congress hovers slightly above zero. And repealing the estate tax at a cost of $370 billion is on the list and backed by Senate Majority Leader John Thune (R-SD), but it's politically impossible in the current Congress considering the fiscal environment. 

Another informative purpose for the list may be to educate lawmakers about the inherent trade-offs needed to reduce taxes in a fiscally responsible way. This could be intended to assuage House Freedom Caucus members, some of whom are reluctant to support tax cuts (and raise the debt limit) without commensurate spending curbs or other revenue offsets.

Perhaps the most telling thing to know about the policy option list is that Committee on Ways and Means Chairman Jason Smith (R-MO) hasn't said a word about it publicly. That means the person who has the job of actually writing the legislative language for the reconciliation bill's tax provisions will probably have his own priority list for revenue changes. You'll know from the volume of cheers and jeers for anything Chairman Smith proposes that he holds pen that writes the bill. #TaxTake

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