With an upcoming recession likely, there is new urgency to preserve the pro-growth policies contained in the 2017 Tax Cuts and Jobs Act (TCJA), said U.S. Rep. Vern Buchanan (R-FL) during an Oct. 26 U.S. House Ways and Means Committee roundtable focused on extending key elements of the TCJA.
“At the end of this year, 100 percent expensing will begin to phase out — a huge hit to industries like farming and manufacturing at a time when they need capital the most,” Rep. Buchanan said. “Further, without congressional action, 23 different provisions of TCJA are set to expire after 2025, imposing significant tax hikes on middle-income families and Main Street businesses across the country.”
House Ways and Means Committee Republicans, led by Select Revenue Measures Subcommittee Ranking Member Mike Kelly (R-PA), last week held a virtual meeting entitled, “Make TCJA Permanent to Lock in Low Taxes for Families and Small Businesses.”
Rep. Buchanan said that when the TCJA became law, “Republicans delivered the most comprehensive overhaul of the U.S. tax code in more than three decades and helped our country achieve historic economic growth.”
“We delivered significant tax relief for low and middle-income families and small businesses across all income levels,” he said.
Permitting provisions to lapse would mean that a single mother of two earning $52,000 would face a $1,500 tax hike and a married couple with two children and $85,000 in income would face a $1,700 tax hike in 2026, according to initial estimates the congressman cited from the nonpartisan Tax Foundation.
“That’s income that isn’t going towards everyday staples like food, diapers, or school supplies,” said Rep. Buchanan, who on Sept. 20 sponsored the TCJA Permanency Act, H.R. 8913, to make the individual and small business tax cuts permanent. The bill to date has garnered 68 GOP cosponsors.
“I’ve also introduced the American Innovation Act to assist our entrepreneurs,” said Rep. Buchanan during the roundtable. “This bill would quadruple the amounts small business start-ups can deduct from their tax bill, lowering the barrier-to-entry and driving capital formation.”
The American Innovation Act of 2022, H.R. 7503, which Rep. Buchanan sponsored in April with original cosponsors Rep. Kelly and U.S. Rep. Brad Wenstrup (R-OH), specifically would revise the tax treatment of business start-up or organizational expenditures, according to the congressional record bill summary.
Both H.R. 7503 and H.R. 8913 are under consideration by the House Ways and Means Committee.