[Update: The House Ways and Means Committee passed the Tax Cuts for Working Families Act on Tuesday.]
On Friday, Republicans on the House Ways and Means Committee proposed a comprehensive package of tax cuts targeting “workers, families, farmers, and small businesses.”
As part of a new legislative tax relief and jobs package by Ways and Means Committee Chairman Jason Smith, R-Mo., the American Families and Jobs Act combines three bills: the Tax Cuts for Working Families Act (H.R. 3936), the Small Business Jobs Act (H.R. 3937), and the Build It in America Act (H.R. 3938).
“It builds on successful tax policies enacted by Republicans that spurred higher economic growth—far more than projected—and sparked the fastest growth in real wages in 20 years,” Smith said in a statement. “These policies will provide relief for working families, strengthen small businesses, grow jobs, and protect American innovation and competitiveness.”
The committee said the Tax Cuts for Working Families Act, the Small Business Jobs Act, and the Build It in America Act will be considered “in the coming days.”
"The new House Republican Majority on the Ways & Means Committee have put forward their first tax priorities for the 118th Congress, establishing their benchmark for negotiations with the Senate on a potential tax deal later this year," Andy Remo, Director of Federal and State Legislative Affairs with American Retirement Association, explained.
Democrats in both chambers expressed their disapproval, with Senator Ron Wyden, D-Ore., Chairman of the Senate Finance Committee, specifically criticizing proposals in the legislation to repeal parts of the Inflation Reduction Act.
“As I’ve told Republicans repeatedly, Democrats are on board with fixing business tax incentives like R&D expensing as long as Congress also passes support for the most vulnerable children and families on the same scale,” Wyden said. “The tax uncertainty a lot of businesses are dealing with right now, particularly around R&D expensing, is a direct result of the timing and budget gimmicks Republicans used to inflate their 2017 corporate tax handouts.”
“Too much of this package is made up of giveaways to the wealthy and big corporations, and it goes without saying that repealing landmark clean energy incentives from the Inflation Reduction Act is a nonstarter in the Senate,” he added.
Tax Cuts for Working Families Act (H.R. 3936)
The bill provides a new $4,000 guaranteed deduction bonus for the next two years, which applies on top of the current guaranteed deduction, also known as the standard deduction.
Small Business Jobs Act (H.R. 3937)
Currently, business owners are required to send tax forms to contractors that provide more than $600 of work to their business. One provision increases the reporting threshold for subcontract labor from $600 to $5,000. Another provision, among others, would raise the ITS reporting threshold from $600 back to $20,000 for gig workers who use Venmo or PayPal for sales activity.
Build It in America Act (H.R. 3938)
Lastly, the Build It in America Act would extend “the ability for companies to immediately deduct research and development (R&D) costs,” extend interest deductibility for borrowing costs for small- and mid-sized businesses and stop agricultural land purchases by foreign adversaries with a tax rule.
