For the first time in 17 years, and just in time for “Super Bowl of Taxes”, Senate Republicans will have a new leader in Sen. John Thune (RS.D.). Thune won the support of his colleagues last week after Sen. Mitch McConnell (R-Ky.) stepped down as party chairman. It's hard to imagine a lawmaker better prepared to hit the ground running.
Thune has served as Republican no. 2 of the room since 2019 and was among “core fourThe tax writers who drafted the Tax Cuts and Jobs Act (TCJA) of 2017 when Republicans controlled both houses of Congress and the White House. Thune will have an opportunity to immediately put his experience to use in navigating the ins and outs of Senate procedure and getting GOP priorities across the finish line.
The Constitution requires that tax policy begin in the House of Representatives. Still, under the control of a one-party government, Senate rules will play a crucial role in shaping tax legislation next year.
That's because Republicans are preparing to bypass the chamber's filibuster rules and avoid having to reach a deal with Democrats by pursuing tax reform through the budget reconciliation process. That plan mirrors how the GOP pursued tax reform in 2017, in which Thune had a front-row seat as the party's number three. Thune's background could make it easier to navigate the chamber's arcane reconciliation rules, allowing Congress to more quickly send a tax bill to President Trump's desk.
However, setting the Senate plan early next year could be tricky. Thune will also derail nomination hearings and votes to create a second Trump administration, and we've already seen the President-elect's names to fill cabinet posts facing a bumpy road to confirmation.
Thune and President-elect Donald Trump have at times had a frosty relationship, with Trump going so far as to call for a primary challenge to Thune in 2020. How does the incoming majority leader handle his relationship with the White House, especially if Trump tries to influence what is and isn't included in a big tax bill next year, it could significantly speed up or slow down the tax writing process.
Thune's priorities
As for his priorities, Thune has developed a reputation as a shrewd negotiator who favors pro-growth tax policies. He was the primary architect of the portion of the TCJA that changed the way pass-through entities are taxed and supports preserving policies like stepped-up basis upon death, taxing carried interest as capital gains, and eliminating the estate tax.
It remains unclear how aggressively Senate Republicans might try to offset the cost of extending or building on their tax cuts in 2017. Thune could find some revenue by limiting state and local tax deductions, but overall , he and his Senate Republican colleagues seem less interested than House Republicans in offsetting the cost of expanding and expanding the TCJA as much as possible.
Thune's biggest challenge may well be a less-than-predictable White House agenda, where priorities sometimes drift in and out of the conversation as quickly as social media posts on a feed. Time will tell if Thune and his leadership team can hold their ground as a second Trump administration steers our ship of state into 2025 and beyond.
Elias Vetter contributed to this article.