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Sen. Daines, Rep. Smucker Introduce Bill to Extend and Make Permanent the Section 199A Deduction: On Jan. 23, Sen. Steve Daines (R-MT) introduced the Main Street Tax Certainty Act (S. 213), which would make permanent the Tax Cuts and Jobs Act (TCJA, Pub. L. 115-97) provision that established the Section 199A 20% deduction for passthrough businesses. The deduction provides greater equivalence between the effective tax rates of passthrough businesses and C Corporations since the corporate rate was permanently lowered to 21% as part of the TCJA. If the Section 199A provision is allowed to expire, many passthrough businesses would be taxed at the individual level, with the top marginal individual income tax rate being 37%, rather than the 29.6% effective tax rate with the section 199A deduction. Sen. Daines’ bill is cosponsored by Senate Majority Leader John Thune (R-SD) and 38 other Senate Republicans. Companion legislation (H.R. 703) was introduced in the House by Rep. Lloyd Smucker (R-PA) and has 155 cosponsors, including Democratic Reps. Josh Gottheimer (D-NJ) and Henry Cuellar (D-TX).
Senate Finance and Foreign Relations Committees Reintroduce Taiwan Quasi-Tax Treaty: On Jan. 23, Senate Finance Committee Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR), along with Foreign Relations Committee Chairman Jim Risch (R-ID) and Ranking Member Jeanne Shaheen (D-NH), reintroduced legislation (S. 199) that would establish treaty-like tax benefits between the United States and Taiwan. The bill would call for a tax agreement between the United States and Taiwan that aims to mitigate double taxation for individuals and businesses operating in either country implemented by amendments to the U.S. tax code. Specifically, the bill would provide reciprocal tax benefits for qualified residents of Taiwan and U.S. citizens subject to taxation in Taiwan, and provide adjustments to withholding tax rates, exemptions for qualified wages and rules for business income derived through permanent establishments.
Ways and Means Republicans Reintroduce Bill to Retaliate Against OECD Deal: On Jan. 22, House Ways and Means Committee Chairman Jason Smith (R-MO), joined by all committee Republicans, introduced the Defending American Jobs and Investment Act (H.R. 591). The bill is substantially similar to legislation the committee introduced in the last Congress and complements an executive order issued by President Donald Trump on Jan. 20 that withdraws the United States from the Organisation for Economic Co-operation and Development (OECD) global tax agreement. Republicans and some Democrats have been critical of the agreement, asserting that the Biden administration negotiated the deal without congressional consultation. Congressional critics also contend that the deal negotiated could lead to the loss of up to $120 billion in U.S. tax revenue, per an analysis by the Joint Committee on Taxation in the prior Congress.
Trump Issues Several Executive Actions Concerning U.S. Energy Production and Funding Allocations: Shortly after taking office on Jan. 20, President Donald Trump issued multiple executive orders and memoranda, many of which relate to domestic energy production as well as disbursements of funds allocated through the Inflation Reduction Act (IRA, Pub. L. 117-169) and Infrastructure Investment and Jobs Act (IIJA, Pub. L. 117-58) tax credits, grants and loan programs. One of the most significant executive orders, titled “Unleashing American Energy,” calls for the immediate pause of the disbursement of IRA- and IIJA-appropriated funds until they are reviewed by department officials and a report on those findings is submitted to the directors of the National Economic Council and Office of Management and Budget. The pause affects all “processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds.” The pause may affect IRA energy-tax credit allocations, though the scope of the executive order remains unclear as to the types of infrastructure and projects that are subject to the pause.
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Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC. Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.
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