Connect with us

Accounting

Trump allies fret tax-cut plans at risk with GOP infighting in Congress

Published

on

A faction of President-elect Donald Trump’s allies is harboring doubts about Republicans’ chances of passing a sweeping tax bill in 2025 amid party infighting and strategy disputes.

Republicans broadly agree that there’s little room for error on what is a rare opportunity for the GOP to update the Tax Code without having to make any concessions to Democrats. There’s also time pressure: households and privately-held businesses will see their tax bills rise if Congress doesn’t act by the end of the year.

But Republicans openly disagree on how to meet that deadline. Little progress was made on Wednesday night when Trump met with GOP senators, with the president-elect telling reporters at the conclusion of the meeting that it “doesn’t matter” to him how his allies in Congress plan to get his top legislative achievements passed.

Stephen Miller, the incoming deputy White House chief-of-staff and a vocal advocate for an immigration crackdown, has pushed lawmakers to first pursue a border security bill, before pivoting to taxes, an idea Senate Republican Majority Leader John Thune endorsed during his address to open the new Congress.

That pits them against House Republicans, many of whom want to cram all the party’s legislative goals — immigration, energy production and taxes — into a singular bill. That’s an approach that yields to the reality that the tiny House GOP majority — a fractious group of lawmakers willing to torch members of their own party during heated disputes — will have a hard time passing even one bill, let alone two.

“The best chance for a reconciliation bill that includes tax cuts to pass the House is for the tax cuts to be included in the first one, and preferably in one big beautiful bill,” said House Ways and Means Chairman Jason Smith, referring to the legislative process, known as reconciliation, which allows the majority party to advance its priorities with the votes of the opposing party. 

Trump, who made taxes and an immigration crackdown the centerpiece of his 2024 presidential campaign, has waffled on his wishes, further muddying the debate. Over the weekend, he posted that he supported “one powerful Bill that will bring our Country back, and make it greater than ever before.” At a press conference on Tuesday, however, he indicated a willingness to separate immigration from taxes.

“Well, I like one big beautiful bill. I always have. I always will. But if two is more certain, it does go a little bit quicker, because you can do the immigration stuff early,” he told reporters.

Senator Rand Paul, a Kentucky Republican, said following Wednesday’s meeting with Trump that they discussed using tariff hikes as a way to offset the cost of the tax cuts, a politically risky move that could further divide Republicans.

Thune, after meeting with House Speaker Mike Johnson on Tuesday, joked with reporters that the plan for sequencing the legislation is “as clear as mud.”

After the Wednesday meeting with Trump, Thune told reporters they are all united on the goals but lawmakers still have different views on the legislative strategy to get there.

Strategy planning

Congress also must raise the debt ceiling this year — an issue that has routinely caused Republican infighting and soured relationships within the party. Johnson told reporters Tuesday he plans to add a debt ceiling increase to the bill, with the final product put together by “churning it out amongst our colleagues.” He also set an April goal to pass it out of his chamber.

Paul, however, said Wednesday there’s opposition from Republicans in both chambers to addressing the debt ceiling in the bill. 

“We need to do the tax bill in the first 150 days,” said Steve Moore, an informal economic advisor to Trump.

Moore said that he, along with Trump’s former National Economic Council Chair Larry Kudlow and economist Arthur Laffer, urged Trump to tackle taxes first.

“We shouted from the rooftops,” Moore said. “The argument made to Trump that carried the day was that delaying it would put the tax cut at risk.”

The business community has also warned that a delay — or failure — of the tax measure could stymie the economic growth promises Republicans ran on.

“I’m not going to second guess the speaker or the majority leader on the timing of the tax bill, but I will say that from a business perspective, from an investment perspective, a manufacturing perspective, sooner is going to be a whole lot better than later if they truly want to keep their promises that they’ve made,” said Jay Timmons, president and chief executive officer of the National Association of Manufacturers.

Many Republicans also publicly and privately worry that isolating immigration — an issue that has vexed Congress for decades — into an initial bill will take far more time than anticipated and eat up a great amount of political capital and good will, potentially jeopardizing the size, scope and ambition of a tax measure.

History lesson

In 2017, Trump faced a similar legislative strategy quandary on the sequencing of policy when his team spent months trying to repeal the Affordable Care Act only to have then-Senator John McCain, an Arizona Republican, strike down the bill at the last minute. The Trump White House managed to barely pass tax reform that December — and that was with a much larger margin of Republicans in the House. 

That legislation was also hastily written and passed solely with the support of Republicans. At the time, there was a feeling in the Trump orbit that tackling infrastructure or taxes first would have provided the new president with far more political dividends than pursuing the failed health care legislation.

In the closing days of the 2024 election, Trump promised to extend the personal tax cuts from 2017 and expand the state and local tax deduction, while also creating new tax breaks like no taxes on tips, overtime pay or Social Security checks. 

Trump has vowed to Wall Street executives that he would reduce the corporate tax rate to as low as 15%. That laundry list of promises surprised even some of his closest economic advisors, who privately said Trump was unlikely to turn all of this rhetoric into reality. 

Trump, as recently as last weekend, has repeatedly singled out one specific pledge — no taxes on tips — which suggests it could be among the highest priority cuts for the incoming president.

Political calculus

For Republicans, a key calculation is delivering on Trump’s tax promises so the party can hold onto its control of the House of Representatives in 2026. Former House Speaker Newt Gingrich, a close Trump ally, said history shows that Trump needs to pass the tax bill by July 4, 2025, to satisfy voters.

When President Ronald Reagan “did not front-load the tax cuts in 1982-1981, we lost 26 seats in 1982. When Trump did not get the tax bill through fast enough, we lost 40 seats in 2018. We also know that Franklin Delano Roosevelt, by acting aggressively, picked up nine seats,” he said.  

Former Representative Kevin Brady, who led efforts on Trump’s 2017 tax overhaul, said Republicans ought to “educate” — or perhaps browbeat — their colleagues to make a priority of the cuts.

“Failure is not an option. You cannot wreck this economy. You cannot damage this presidency,” Brady said at an event in Washington. “You’re going to find a way to get this done.”

Continue Reading

Accounting

Trump berates Republicans to ‘Stop talking,’ pass tax cuts

Published

on

Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

Continue Reading

Accounting

97% say CPA firms not using tech efficiently says survey

Published

on

While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

Continue Reading

Accounting

Trump tax bill fails in House panel

Published

on

A key House committee on Friday failed to advance House Republicans’ massive tax-and-spending bill after hard-line conservatives bucked President Donald Trump and blocked the bill over cost concerns.

The House Budget Committee rejected the bill 21-16, with Republican Reps. Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde joining Democrats to vote against it. The four hardliners demanded deeper cuts to Medicaid and other government programs.

It’s incredibly rare for bills to fail at this step in the process, with the committee vote typically serving as a rubber-stamp to the bill before it moves to the House floor. 

Representative Chip Roy
Rep. Chip Roy

Stefani Reynolds/Photographer: Stefani Reynolds/B

The setback could be temporary and the panel can still approve the bill once the GOP differences are resolved. 

Republican Lloyd Smucker, who switched his vote to “no” to allow the committee to bring it up again, told reporters the committee will hold another vote on Monday. 

Trump, whose social media muscle and calls to lawmakers have previously been crucial to advancing his priorities, inserted himself in the debate less than two hours before the vote, berating dissidents and urging them to fall into line. 

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

The bill’s failure exposes the power a small group of lawmakers can wield as Republicans seek to push Trump’s “one big, beautiful bill” through the House with very narrow margins. GOP infighting threatens to kill the bill, or at least significantly delay Republicans’ plans to pass the bill next week.

(Read more:‘One big beautiful bill’ full of tax surprises.”)

Republican holdouts spelled out their demands during Friday’s committee meeting, including accelerating new work requirements for able-bodied adults on Medicaid to take effect immediately rather the 2029 deadline set in the legislation. The ultraconservatives also want a faster phase-out of clean energy tax credits.

It wasn’t immediately clear how House Republicans will re-group to address the divisions and advance the bill.

“I’ll let you know this weekend if we’re going to return first thing Monday. That’s the goal at this point,” Budget Chairman Jodey Arrington said after the vote. 

House Majority Leader Steve Scalise, who is helping to broker a deal among Republicans, said party leaders are in touch with the Trump administration to address some of the changes demanded by hardliners.

“We are all in agreement on the reforms we want to make,” Scalise said. “We want to have work requirements. We want to phase out a lot of these green subsidies. How quickly can you get it done?”

House Speaker Mike Johnson on Thursday pledged he would work through the weekend to broker a compromise between moderates, who are seeking an increase in state and local tax deductions, and ultra-conservatives, who say they won’t support it without more spending cuts.

(Read more:Here are the winners and losers in the Republican tax bill.“)

Members from both factions — the SALT Republicans representing high-tax districts and the fiscal hawks who want steeper budget reductions — have threatened to block the bill if House leaders don’t acquiesce to their demands. 

“No one group gets to decide all this stuff in either direction,” Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Both Roy and Norman urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time.”

If the legislation passes the House, it would then head to the Senate where it would likely undergo significant changes. Several members, including Senator Josh Hawley of Missouri, have stated opposition to the Medicaid cuts in the House bill.

Continue Reading

Trending