Our nation’s political environment has grown increasingly divided along partisan lines. The recent record-breaking 35-day government shutdown and the possibility of another shutdown at the end of the fiscal year stand as testaments to the ideological chasm between the two parties. Some issues, however, are not and should not be partisan. Protecting taxpayers from unintended complexity and confusion should be one of them.
Democrats’ unwillingness to prioritize nonpartisan technical corrections legislation, legislation that has in the past attracted bipartisan consensus, harms taxpayers by forcing them to abide by a flawed tax code.
The Tax Cuts and Jobs Act was the most comprehensive overhaul of the tax code enacted within the past several decades. Because TCJA had such a wide scope, the version that became law included some technical errors. Drafting flaws in sweeping legislation like this are not uncommon and are routinely fixed with a technical corrections bill. For example, the Technical and Miscellaneous Revenue Act of 1988 was passed with overwhelming support to clarify sections of the Tax Reform Act of 1986.
Before the 116th Congress was sworn in, the outgoing House Ways and Means Committee Chairman Kevin Brady, R-Texas, published a discussion draft technical corrections bill that would fix many of the errors found in the TCJA. One of the most important provisions this technical corrections bill would address is the infamous “retail glitch,” which unintentionally prevents qualified income property from being depreciated over the intended 15-year period. The draft would also reach back to the Working Families Tax Relief Act of 2004 to clarify an issue in determining eligibility for the child tax credit.
However, public statements made by key Democratic staffers from the powerful House and Senate tax-writing committees indicate that the party is in no rush to prevent these drafting errors from hurting taxpayers. They contend that Republicans left them out of the decision-making process on TCJA, therefore why should they help fix a law they never agreed with? Democrats clearly seem to be uninclined to help correct the law even if their obstructionism ends up costing taxpayers.
A recent article published by Tax Notes references a conversation with a House Democratic tax aide stating, “Democrats will likely introduce a bill fixing a TCJA drafting error, paired with a more generous child tax credit and earned income tax credit.” The child tax credit and the earned income tax credit are “refundable” credits that provide federal payments to low-income individuals above and beyond their income tax obligation. By tying a substantive policy change to a drafting error resolution, Democrats decrease the likelihood of a technical corrections bill passing both chambers of Congress and being signed into law.
The Joint Committee on Taxation defines a technical corrections bill as “legislation that is designed to correct errors in existing law in order to fully implement the intended policies of previously enacted legislation.” Another important aspect of such measures is they are generally revenue neutral. The Joint Committee on Taxation determines how changes in taxes will affect revenues based off lawmakers’ intentions with the legislation. Since the purpose of technical corrections is to simply realign laws with lawmakers’ original intentions, the cost of technical corrections is already accounted for in the committee’s original revenue estimates.
Technical corrections bills should not be partisan tools used to further one-sided political agendas. Lawmakers bicker back and forth while those who are left to decipher confusing tax policy suffer.
In 2018, National Taxpayers Union Foundation determined that the total economic value of the compliance burden imposed by the tax code could be calculated at $303.8 billion. One of the TCJA’s goals was to simplify the tax code and reduce compliance costs. If errors are not fixed through a technical corrections bill, the promise of a simpler tax code will be undermined significantly, harming taxpayers.
Using Brady’s draft as a starting point, Republicans and Democrats should work together to pass a technical corrections bill that would fix TCJA. Preventing unintended confusion and unnecessary complexity for law-abiding taxpayers should not be a partisan issue.
If the divided 116th Congress cannot come together to pass even a simple bill fixing minor errors, what can they compromise on? Democrats are wrong to use technical corrections for TCJA as a partisan negotiating tool, and they do so at the expense of taxpayers across the nation.
Parker Gardner is an intern with the National Taxpayers Union.
