Skip to main content

Tax Take: Put Me in, Coach: Tax Team Game Plans (Part Two)

Tax Alert

Last week, we discussed the issues addressed by five of the 10 Tax Teams established by House Ways and Means Committee Chairman Jason Smith (R-MO) "to study key tax provisions from the 2017 Trump tax cuts that are set to expire in 2025 and identify legislative solutions." Here are probable top issues for the other five Tax Teams.

Rural America: Chaired by Rep. Adrian Smith (R-NE) 

In a statement, Rep. Smith says his team will "promote legislative solutions to protect rural Americans impacted by Tax Cuts and Jobs Act provisions set to expire in 2025." He lists the estate tax, child tax credit (CTC), the section 199A pass-through deduction, and bonus depreciation as areas of focus. Rep. Smith is also the lead sponsor of legislation to permanently extend the use of earnings before interest, taxes, depreciation, and amortization (EBITDA) for purposes of the interest expense deduction limitation.

Community Development: Chaired by Rep. Mike Kelly (R-PA) 

We anticipate this team will address tax incentives that encourage investment in distressed communities, such as the opportunity zone, work opportunity, new markets, and low-income housing tax credits. Rep. Kelly's Neighborhood Homes Investment Act and Opportunity Zones Transparency, Extension, and Improvement Act will likely receive consideration by the team.

Supply Chains: Chaired by Rep. Carol Miller (R-WV) 

In a statement, Rep. Miller notes that her tax team will focus on "ensuring our tax system treats all sources of energy fairly, the corporate rate remains competitive, and long-term investment is properly rewarded."

U.S. Innovation: Chaired by Rep. Ron Estes (R-KS) 

Rep. Estes says he will focus on progress "that reflects our creative spirit and encourages more homegrown research, experimentation, development and innovation – and makes it possible for the people and companies doing this cutting-edge work to make the U.S. their home base." We anticipate this team will focus on research incentives, particularly on the research and development (R&D) credit and section 174 R&D expensing, especially considering Rep. Estes is the lead Republican co-sponsor of the American Innovation and R&D Competitiveness Act of 2023 (which would make section 174 R&D expensing permanent).

Global Competitiveness: Chaired by Rep. Kevin Hern (R-OK) 

Rep. Hern says his team will broadly focus on "addressing critical international tax policies that keep businesses in the U.S. and foster economic growth." Rep. Miller, a member of this team as well, adds that she looks forward to working "to stop the encroaching global socialism perpetrated by the [Organisation for Economic Cooperation and Development (OECD)]." The statement mentions that Rep. Ron Estes, another team member, works as "a fierce advocate for U.S. global competitiveness, including his opposition to the detrimental aspects of the OECD's Pillar 1 and Pillar 2 framework[s]." We also expect the team to prepare to defend the core international provisions enacted as part of the Tax Cuts and Jobs Act (TCJA), including global intangible low-taxed income (GILTI) and the base erosion and anti-abuse tax (BEAT).

This wraps up our initial take on these Tax Teams... or does it? Senator Mike Crapo (R-ID) says he likes the approach taken by Chairman Smith and is considering a similar set of working groups to prepare for the coming tax policy debate in 2025. Pressed for details, Sen. Crapo said only that there's "more to come." We may be talking about these Republican tax groups right up to the first Tuesday in November. The election results will determine if this partisan preparatory work leads to legislative results or just collects dust on a shelf. #TaxTake

Upcoming Speaking Engagements and Events

Loren will speak on the panel "The Brave New World of Profit Allocation Post-Pillar One" at the Tax Council Policy Institute's 25th Annual Tax Policy Practice Symposium "The Gathering Storm: 2025 and the Coming Tax and Fiscal Showdown" on May 16.

Marc will moderate the session "Tax Legislative Outlook" at the FBA 2024 Insurance Tax Seminar on May 30.

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.