In a sign that lawmakers are not content simply waiting until next year to address a litany of scheduled tax hikes, House Ways & Means Committee Chairman Jason Smith yesterday announced a series of “tax teams” tasked with identifying legislative solutions to avert the 2025 fiscal cliff.
Ten groups in total, each comprised of at least give Republicans from the panel, will address a specific policy area, from manufacturing to global competitiveness.
The team that caught our eye will focus on Main Street, and is appropriately led by Congressman Lloyd Smucker (PA), a staunch ally of the pass-through business community and leader of the House 199A permanency bill. The other team members are Reps. Greg Steube (FL), Vern Buchanan (FL), Adrian Smith (NE), Jodey Arrington (TX), and Beth Van Duyne (TX), all of whom we’ve had the pleasure of working alongside for years and who we know understand the magnitude of the challenge ahead.
Of course, what we’re referring to is the looming expiration of key provisions for the 2017 tax bill – namely Section 199A deduction, coupled with significant increases in rates – which will hit the vast majority of businesses currently operating in America.
Absent action, the marginal rates faced by millions of pass-throughs are set to spike come the end of 2025 – in many cases to over 41 percent – while large corporations will continue to benefit from the far lower 21-percent rate. That’s an unsustainable gap that puts Main Street at a significant disadvantage and threatens the economic health of thousands of communities nationwide.
Big problems require big solutions, and given what’s at stake we know Congress is going to have to act. So while the Main Street Tax Team and all the other groups have their work cut out, we’re confident in their ability to secure a favorable outcome and we look forward to working with them.