On Friday, May 9, the House Committee on Ways and Means released official notice of its upcoming Tuesday, May 13 markup of the tax title of the reconciliation bill.

The committee is releasing the tax title in two phases – preliminary text was released on May 9, with an anticipated substitute amendment (technically an "amendment in the nature of a substitute") to follow in advance of the May 13 markup. The Joint Committee on Taxation (JCT) released the following:

• Explanation of the preliminary text
• Cost estimate
• Distributional analysis

The preliminary text makes many of the expiring Tax Cuts and Jobs Act (TCJA) provisions permanent, along with some enhancements, including:

• Permanency of the lower individual tax rate structure, including the top rate of 37 percent
• Permanency of the increased standard deduction, with an additional increased deduction for 2025-2028
• Permanency of the child tax credit (CTC), with an increase in the credit to $2,500 for 2025-2028
• Permanency of the section 199A pass-through deduction, with an increase from 20 percent to 22 percent
• Permanency of the estate and gift tax exemption at $15 million (adjusted for inflation)
• Permanency of the current rates for global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), and the base erosion and anti-abuse tax (BEAT)

The forthcoming substitute amendment is anticipated to address some of the most controversial provisions of the tax title, including:

• The Trump campaign proposals, including no tax on tips, overtime, and Social Security benefits
• Extension of 100 percent bonus depreciation, research and development (R&D) expensing, and the more favorable interest expense deduction rules
• An increased individual state and local tax (SALT) deduction cap
• Revenue offsets, including potential tax increases on the wealthy and the potential scaling back of Inflation Reduction Act (IRA) clean energy credits

The provisions in the preliminary text already have a revenue cost of $4.9 trillion. Speaker Mike Johnson's (R-LA) decision last week to endorse $1.5 trillion in spending cuts, rather than $2 trillion, will decrease the ultimate size of the tax title from $4.5 trillion to $4 trillion. As a result, there will be significant pressure on revenue offsets even before additional tax relief such as the Trump campaign proposals are added in the substitute amendment.

This week is pivotal not only for tax policy, but also for the president's overall economic and political agenda. "Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people," Chairman Jason Smith (R-MO) said when announcing the bill. It all starts tomorrow at 2:00 pm ET at the Tuesday markup. #TaxTake

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