Our last two issues have focused on the potential items that could be included in a next tax bill, whether it be a partisan reconciliation bill or a bipartisan bill. Now let's focus on timing: what are the potential windows of opportunity for advancing another tax bill?

Last Quarter of 2025: Recent comments by House Committee on Ways and Means Chairman Jason Smith (R-MO) cast considerable doubt on the prospects of an additional reconciliation bill in the short term, but a traditional year-end bipartisan tax extenders bill is still in the cards. The cornerstone would include the enhanced Affordable Care Act (ACA) premium tax credit, the work opportunity tax credit, and the section 181 expensing rules for film, television, and theatrical productions. How (and when) fiscal year 2026 government spending is resolved – and whether it includes an extension of the enhanced ACA premium tax credit – will shape the outlook for a year-end bipartisan bill.

Pre-Election 2026: Conventional wisdom tamps down hope for action on significant legislation – particularly tax legislation – in an election year. That said, if Republicans, particularly President Trump, feel that a second reconciliation bill could benefit them in the mid-term elections, we could see a legislative vehicle emerge for a tax title early in the year before the election season begins in earnest. A new wrinkle in the election-year dynamic is Trump's announcement that the Republican Party will hold a mid-term convention in 2026. Such an event could be used to start, continue, or promise the pursuit of a second taxpayer-friendly tax bill to court November voters. Republicans would presumably aim low in terms of revenue impact, balancing deficit concerns against the reluctance to include offsetting tax increases.

Lame Duck Session 2026: Depending on the results of the mid-term elections, the post-election lame duck congressional session may provide a unique window of opportunity for a second tax bill. If Democrats win control the House or Senate, Republicans could make a go-for-broke play at a reconciliation bill before surrendering to divided government for the last two years of Trump's term.

The prospects for the actual enactment of a second tax bill are uncertain and hinge on myriad factors, including next week's government shutdown showdown, the level of White House engagement, polling in advance of the 2026 mid-term elections, and the reported GOP struggle to find the right political messaging to capitalize on the One Big Beautiful Bill Act (OBBBA). If that can't be resolved soon, Republicans may conclude the OBBBA needs some icing on top. #TaxTake

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