The stage is being set for this year's Super Bowl of Tax as we learn who the key players will be in the upcoming administration and the 119th Congress. 

Last week, Senate Democrats minted five new taxwriters, reflecting several retirements and the election losses of Senators Sherrod Brown (D-OH) and Ben Casey (D-PA). The list includes Senator Bernie Sanders (I-VT), who claimed a seat on the Committee on Finance last November before any official decisions had been made. Also joining the taxwriting panel are Senators Tina Smith (D-MN), Ben Ray Luján (D-NM), Raphael Warnock (D-GA) and Peter Welch (D-VT). The only new Republican appointee is Senator Roger Marshall (R-KS); Senate Majority Leader John Thune (R-SD) will remain on the Finance Committee. The committee will retain its 14-13 party ratio.

The addition of Sanders, a self-described democratic socialist, is particularly interesting. Not only does it boost Vermont's clout with two members on the Committee, it will tilt the ideological spectrum of Democratic membership on the panel further leftward. Many of Sanders' views on tax policy will likely find harmony with those of Senator Elizabeth Warren (D-MA), who joined the panel two years ago and has since worked to advance progressive tax policies and spearheaded numerous corporate inquiries into tax and financial issues.

Sanders has an extensive background on tax policy that includes two presidential runs, a stint as Chairman of the Committee on Budget and more recently as Chairman of the Committee on Health, Education, Labor and Pensions (HELP). In Congress, he has chaired a series of Budget hearings over the years to criticize corporate taxpayers and highlight progressive tax policies. It's possible to get a sense of his tax positions just from the titles of the bills he sponsors, which include the Ending Corporate Greed Act, the Corporate Tax Dodging Prevention Act, the End Polluter Welfare Act, and the Tax Excessive CEO Pay Act. 

When he issued a statement in November in anticipation of joining the Committee on Finance, Sanders said he would prioritize "protecting Social Security, Medicare, and Medicaid from Republican attacks, and creating a fair tax system that finally forces the very wealthy to pay their fair share."

At this point, nobody expects bipartisan support for the tax plan being put together by the president-elect and the Republican leaders in both chambers of Congress. As such, the views of Democrats, especially those from the more progressive wing of the party like Warren and Sanders, are not expected to get any legislative traction in this Congress. However, Sanders has been instrumental in moving the party leftward on some key policies, including universal Medicare coverage and the wealth tax that President Biden eventually embraced. 

Legislators aren't the only ones in preparation mode. President Trump is also rounding out his tax team. Last week, he selected Ken Kies to serve as Assistant Treasury Secretary for Tax Policy, a role that would make him the most senior tax advisor in the Department of the Treasury, which will be headed by Scott Bessent. Both positions require Senate confirmation. Kies is a former Chief of Staff for the Joint Committee on Taxation (JCT). Other new Treasury appointees include Daniel Katz as chief of staff, Alexandra Preate as senior counselor to the Treasury secretary, and Hunter McMaster as director of policy planning. 

As the 119th Congress gets underway and we get closer to action on a tax bill, one outstanding question is whether Republicans in Congress will advance a border security/energy production reconciliation bill first and circle back to taxes later this year. In the end it may be up to President Trump. If he does make that fateful call, it will be made with the advice and counsel of Bessent, Kies, and White House National Economic Council Director Kevin Hassett. #TaxTake

In the News

Jorge commented in Tax Notes on the IRS Direct File program facing increased scrutiny with the change in administration and Republican control of Congress: "Congress has had a lot of questions about it — I suspect the incoming administration will also have a lot of questions about it."

Upcoming Speaking Engagements and Events

Loren will speak at the DC Bar Tax Conference on January 15 along with Miller & Chevalier colleagues Layla Asali, Rocco Femia, and Lisandra Ortiz.

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.