For Rep. Dina Titus, D-Nev., it was an opportunity to push the interests of her Las Vegas district: repeal of a tax on sports betting, and funding for a proposed high-speed rail line to cut by half the travel time of tourists and gamblers from Los Angeles.
Rep. Ted Deutch's ask would have a far more sweeping, nationwide impact: a carbon tax that the Florida Democrat says will help the country transition away from fossil fuels.
Titus and Deutch shared one thing in common, along with the other 17 House members and delegates who testified at Tuesday's annual "member's day" hearing before the House Ways and Means Committee. All were Democrats, as Republicans boycotted what they saw as the committee’s first hearing on an emerging infrastructure bill they believe won't consider minority input.
“Regrettably, in our view, today’s hearing is nothing more than another partisan exercise so the Democrat House leadership can set up yet another multitrillion-dollar, one-sided spending bill,” Ways and Means ranking member Kevin Brady said at the outset of the hearing. The hearing would accomplish little other than “to check the box” so Democrats could say they tried to include Republicans in discussions, he said.
That was the last GOP voice heard during the two-hour hearing.
And that seemed fine to the other side, as Democrats proceeded to testify about their parties’ and their own personal legislative wish lists, with several taking victory laps over their win two weeks ago in passing a $1.9 trillion relief bill.
The most frequently mentioned bill was a Democratic standby: To repeal the $10,000 deductibility limit for state and local taxes that was a key part of the 2017 tax code overhaul. Democrats continued their portrayal of the measure as raising taxes on blue states to pay for a bill that mainly favored the wealthy. Republicans counter that a SALT limit repeal would overwhelmingly favor high-income households.
“Four years ago, a double-taxation grenade was lobbed at New Jersey and other high-tax states by the moocher states,” said Rep. Josh Gottheimer, D-N.J. He argues that states like New Jersey pay more in federal taxes than they get back to the benefit of less-populated, more conservative states.
In the last Congress, House Democrats passed a stand-alone bill and two coronavirus relief bills that included SALT limit suspensions, none of which were acted on by the Senate.
At a House Financial Services hearing Tuesday, Treasury Secretary Janet Yellen pledged to Gottheimer that the Biden administration would look at the impact of the SALT cap. She mentioned proposals to repeal or increase the $10,000 limit, as well as President Joe Biden's plan pitched during the campaign to cap tax benefits associated with all itemized deductions at 28 percent.
More than roads and bridges
Ways and Means Chairman Richard E. Neal focused his remarks on the need for an infrastructure bill, but with an updated, more expansive definition. He talked about how Republicans and Democrats historically have agreed on infrastructure needs, but suggested such a proposal could also be an instrument for social policy change.
“Simply put, the road underneath you may get you to work, but it is the access to affordable child care that gets them through the day,” said Neal, a Massachusetts Democrat.
Rep. Lois Frankel, another Florida Democrat, talked about using the upcoming infrastructure measure to "promote building and repairing our social infrastructure." Frankel urged that the one-year expansion of the child tax credit in the $1.9 trillion coronavirus relief law be made permanent, which would “significantly effect women-led and minority households.”
For 2021 only, the aid package expanded the child tax credit from $2,000 to $3,000 per child while increasing the age limit for eligibility from 17 to 18. The credit rose to $3,600 for children under 6 years of age. And the law made the credit fully refundable for this year, meaning lower-income households who don't have much income tax liability could still claim the full credit.
That one-year provision has a steep price tag — almost $110 billion — so making it permanent could cost over $1 trillion for a 10-year period. That's not counting the cost of extending the existing $2,000 child tax credit, which expires at the end of 2025 and could cost over $500 billion to extend through the end of the decade, based on prior Congressional Budget Office and Joint Committee on Taxation estimates.
Also among Democrats’ top hits was the first significant expansion of the 2010 health care law that, among other things, extends premium assistance so that families buying from federal exchanges would only have to pay 8.5 percent of their income for coverage over the next two years.
That provision of the aid package cost about $35 billion, according to the JCT. At Tuesday's hearing, Rep. Lauren Underwood, D-Ill., pitched her bill to make the 8.5 percent of income cap permanent.
Getting a 'handle' on things
Deutch's carbon fee proposal in the last Congress would have set a $15 per metric ton price on carbon initially, rising by $10 a year. While that proposal could raise trillions of dollars in revenue to pay for infrastructure, Deutch would rebate the entire proceeds back to households to help alleviate higher energy costs.
Nonetheless, Deutch had only one GOP cosponsor in the last Congress for his bill, who's now retired: former Rep. Francis Rooney, R-Fla.
Other proposals like Titus' were more parochial in nature. She wants to boost the $15 billion annual cap for private activity bonds — tax-exempt bonds that can be used for private development of projects that can demonstrate a benefit to the general public. The cap annually maxes out, and increasing it could help Brightline Trains, a high-speed rail company that has proposed the Las Vegas to Los Angeles route.
Titus, a longtime supporter of legislation to eliminate the 0.25 percent handle tax on sports wagering in the U.S., repackaged that effort as necessary to aid in the ongoing pandemic recovery. Titus, who is co-chair of the Congressional Gaming Caucus, complains that Nevada operators paid $13.3 million in handle taxes, more than a third of the U.S. total, in 2019.
Handle means a total amount wagered. So for every $1 million that changes hands at a sports book, the handle tax amounts to $2,500.
Titus said the tax hurts legal sports wagering operators, whose numbers have grown since the Supreme Court struck down a federal ban in 2018, but not illegal foreign operators who take bets over the internet.
“The handle tax is aiding illegal offshore gaming operations and hindering the hard-hit gaming industry here at home from rebounding from the COVID-19 pandemic,” she said.