Chief Tax-Writer Seeks Public Input on Extending Tax Reform Measures

The leading tax-writer in Congress wants to hear from the public about extending the 2017 tax reform provisions that will soon expire.

“Next year I plan to do listening sessions all over the country,” House Ways and Means Chairman Jason Smith (R-Mo.) told Punchbowl News on September 20^th.

The individual provisions in the tax reform bill are scheduled to expire at the end of 2025. Smith would like to hear firsthand on how those provisions fared over the last few years and if modifications to them are needed.

“Was that tax provision helpful?” Smith rhetorically asked. “Should it be extended? Should it be made permanent? Should it be left to expire? How could it be modified to be made better?”

Smith seeks to extend the most useful provisions before they expire. Not extending any of them will lead to a massive tax hike in 2026.

“If we do nothing in 2025 it’s a $3 trillion tax increase on virtually all Americans because it affects every individual rate,” Smith said.

The Chairman noted that the 2017 tax reform bill doubled the Child Tax Credit as well as the standard deduction. The reform bill also reduced all individual tax rates, which would return to pre-reform levels if nothing is done.  

Smith also noted that the expiration of the 20% pass-thru deduction would be disadvantageous.

“That could be very detrimental with a small business that is using the 20% deduction right now, and if it expires will probably have a 40% rate. And they will be competing against C corporations, which has a 21% rate,” he said.

The 2017 tax reform bill lowered the top corporate tax rate from 35% to 21% and made the change permanent. Individual measures, on the other hand, were made temporary and are set to expire in 2025.

Smith is apparently open to discussing the fate of most tax provisions in the reform bill, except the $10,000 cap for the federal deduction on State and Local Taxes, or SALT.

“I’d rather talk about pepper,” he said.

Standing between now and the expiration of the individual provisions is the 2024 elections. Smith said the outcome of the elections will play a huge role in the fate of the expiring tax provisions.

“It depends on how the elections go for how the tax package is created,” he said. “It’s going to be the Superbowl of taxes in 2025.”