Capitol Hill Recap: ‘Tax Teams’ Announced

The main tax committee on Capitol Hill this week announced the groups that will scrutinize the fate of expiring tax provisions in the Tax Cuts and Jobs Act.

What Went Down:

• The House Ways and Means Committee announced its “Tax Teams.” Scrutinizing TCJA is the next step.

Let’s Get To It:

Don’t Tax You, Don’t Tax Me…

The subhead above is part of a well-known quote in the D.C. tax world: “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”

Former Senator Russell B. Long (D-La.) has been attributed for saying this quote. It basically means, don’t increase taxes on constituents who can vote you out of office. Instead, increase taxes on entities that can’t hurt your political ambitions.

Next year, taxes will be a huge topic on Capitol Hill, and the tax quote will likely be mentioned a few times.

The individual tax provisions from the Tax Cuts and Jobs Act, which includes the pass-thru deduction, Opportunity Zones, as well as estate and gift measures, will expire at the end of 2025. There is expected to be a Herculean effort to extend at least part of these measures.

But before the debate over tax extensions can begin, lawmakers on the tax-writing House Ways and Means Committee need a better understanding for what these tax provisions do, and more importantly, who benefits from them or who pays them.

The number of current lawmakers who were on the House Ways and Means Committee in 2017 when the Tax Cuts and Jobs Act was enacted are few. To get the newer members up-to-speed on the bill’s measures the committee has created “Tax Teams.” These groups will scrutinize specific provisions in the 2017 tax bill to determine if they should be extended, modified or allowed to expire.

The Teams are:

• American Manufacturing: 

Chair: Rep. Vern Buchanan (R-Fla) 

Rep. Greg Murphy (R-NC)* 

Rep. Jodey Arrington (R-Texas) 

Rep. Claudia Tenney (R-NY) 

Rep. Nicole Malliotakis (R-NY) 

• Working Families:

Chair: Rep. Brian Fitzpatrick (R-Penn)

Rep. Nicole Malliotakis (R-NY)* 

Rep. Blake Moore (R-Utah) 

Rep. Michelle Steel (R-Calif)

Rep. Mike Carey (R-Ohio)

• American Workforce: 

Chair: Rep. Darin LaHood (R-Ill) 

Rep. Mike Carey (R-Ohio)* 

Rep. Brad Wenstrup (R-Ohio)

Rep. Lloyd Smucker (R-Penn)

Rep. Brian Fitzpatrick (R-Penn) 

• Main Street:

Chair: Rep. Lloyd Smucker (R-Penn)

Rep. Greg Steube (R-Fla)* 

Rep. Vern Buchanan (R-Fla)

Rep. Adrian Smith (R-Neb) 

Rep. Jodey Arrington (R-Texas) 

Rep. Beth Van Duyne (R-Texas) 

• New Economy: 

Chair: Rep. David Schweikert (R-Ariz)

Rep. Beth Van Duyne (R-Texas)* 

Rep. Greg Murphy (R-NC) 

Rep. Claudia Tenney (R-NY)

Rep. Michelle Steel (R-Calif)

• Rural America: 

Chair: Rep. Adrian Smith (R-Neb) 

Rep. Michelle Fischbach (R-MN)* 

Rep. Randy Feenstra (R-Iowa)* 

Rep. David Kustoff (R-Tenn)

Rep. Greg Steube (R-Fla)

• Community Development:

Chair: Rep. Mike Kelly (R-Penn)

Rep. Claudia Tenney (R-NY)* 

Rep. Darin LaHood (R-Ill)

Rep. Blake Moore (R-Utah)

Rep. Mike Carey (R-Ohio)

• Supply Chains: 

Chair: Rep. Carol Miller (R-W.Va)

Rep. David Kustoff (R-Tenn)* 

Rep. Brad Wenstrup (R-Ohio)

Rep. Drew Ferguson (R-Ga)

Rep. Michelle Fishbach (R-MN)

Rep. Randy Feenstra (R-Iowa)

• U.S. Innovation: 

Chair: Rep. Ron Estes (R-Kan)

Rep. Michelle Steel (R-Calif)* 

Rep. David Schweikert (R-Ariz)

Rep. Drew Ferguson (R-Ga)

Rep. Kevin Hern (R-Ok) 

Rep. Greg Murphy (R-NC) 

• Global Competitiveness: 

Chair: Rep. Kevin Hern (R-Ok) 

Rep. Blake Moore (R-Utah)* 

Rep. Mike Kelly (R-Penn) 

Rep. Ron Estes (R-Kan)

Rep. Carol Miller (R-W.Va) 

Rep. Randy Feenstra (R-Iowa) 

*Denotes Vice Chair 

These groups will study the tax measures that fall under their category. They are also expected to hold public hearings on the tax measures within their jurisdiction. These hearings will be held around the country and will host witnesses from the surrounding area to speak about how the expiring tax measures have helped or hurt them.

These committees are currently composed of only Republican House members (representing the majority) reflecting the fact that a Republican House majority passed the Tax Cuts and Jobs Act in 2017.

Legislative outlook: As has been written in prior Recaps, the outcome of the 2024 elections will have an enormous impact on how these tax measures are debated, meaning the final conclusions from the Tax Teams about the 2017 tax reform may only matter if the current Republican majority maintains control of the House.

During the debate about extending the 2017 tax reform bill, cost will be a big topic of discussion. This debate will be over whether extending these expenditures need to be offset, and if they are offset, how are they offset. Congress basically has two levers when it comes to raising revenue: Tax increases or spending cuts.

The debate over how to pay for extending the tax reform measures could decide which provisions get extended and which don’t.

To avoid a huge, deficit increasing tax bill while also extending nearly all tax measures, tax staffers have told Eide Bailly that extending the 2017 tax measures might be done a year at a time. This is because the cost to extend them for a longer period would be too expensive and a political liability.

Pardon if this recap missed a monumental moment, but we can recap it next time!

Adios amigos!