On December 6, the tax-writing House Ways & Means Committee’s Subcommittee on Tax Policy held a hearing to look into extending those 2017 Tax Cuts and Jobs Act (TCJA) individual and estate tax provisions that are set to expire as of 2026. There was, of course, the predictable partisan squabbling over “tax cuts for the wealthy” as compared to “tax cuts that stimulate economic growth.” But there was also considerable evidence that there is bipartisan support for a fair number of the TCJA’s provisions, and for some other tax cut ideas.
Specifically, subcommittee members touted the economic growth that came from the TCJA’s 20 percent deduction for non-corporate business income, and opportunity zones. Some of that support was tempered, however, by comments indicating that the deduction (along with other elements of the TCJA) benefits those who do not need it (e.g., those making $1 million or more per year).
Also discussed at the hearing were other tax ideas, including what some committee members called “the extreme” FAIR Tax Act—a flat tax based on consumption that has support from some far-to-the-right lawmakers, but little in the way of broad support. However, at least a hearing on the proposal was promised at the time the House was voting on electing then-Speaker Rep. Kevin McCarthy (R-CA) last January. To many on the committee, this hearing’s focus on the FAIR Tax was the fulfillment of that promise, but not an indication of support for the bill.
Prospects: Debate over which elements of the TCJA to extend or make permanent will start in a big way next year, probably right after Congress settles the government funding issue (and that must be done by February 2). Legislative action is unlikely prior to 2025, the last year the TCJA’s individual and estate tax provisions remain in effect. However, between now and then, expect fulsome debate on what to keep, what to modify, and what to let expire. We will keep you informed as the debate unfolds.
NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.