A fierce debate is brewing in Washington over President Trump’s legislative agenda, particularly his proposed tax cuts. While some Republicans, like incoming Senate Majority Leader John Thune, suggest splitting these priorities into multiple bills, House Ways and Means Committee Chairman Jason Smith is pushing for a single, complete package.
Speaking at the CNBC CFO Council Summit, Smith argued that historical precedent favors a single reconciliation bill, citing past instances where both parties have successfully passed such legislation. He emphasized that reconciliation,which requires only a simple majority,is crucial given the GOP’s narrow House majority.
“so to come up wiht the idea that we will do a small reconciliation at the beginning that does energy and immigration and defense, and a second will be tax, is very foolish,” Smith said. “it breeds failure, from my personal perspective.”
Smith believes that a single, expansive bill encompassing President-elect Trump’s priorities, including energy, immigration, and tax cuts, is the most effective approach. He acknowledges the challenge, anticipating a slim GOP majority of 217-215 in the House, but remains confident in his ability to navigate the legislative process.
“We will definitely have a task ahead of us to thread the needle,” Smith told CNBC Washington correspondent Emily Wilkins at the CFO Council Summit.
Smith’s stance contrasts with Thune’s proposal to divide GOP priorities into multiple bills. However, Smith contends that the House, with its contingent of deficit hawks, may pose a greater obstacle to passing a tax cut bill than the Senate.
“No one in the House understands tax policy better than I do and I know what’s necessary to get to 217,” Smith asserted.
One major concern surrounding the proposed tax cuts is their potential impact on the deficit. The congressional Budget Office estimates that extending the expiring 2017 tax cuts alone would add $4.6 trillion to the national debt. However, Smith maintains that existing tax policy should not be treated as new spending when extended.
“Existing tax policy is never offset,” Smith stated.
He argues that the 2017 tax cuts did not increase the deficit,pointing to higher-than-projected revenue in recent years. Smith attributes this to strong economic growth and a historically high corporate tax revenue.
While Smith acknowledges that spending remains a concern, he believes that the focus should be on controlling expenditures rather than raising taxes.
“If you believe we’re not taking enough taxes from American then make that argument, but the facts don’t add up that way if look at 2017,” he concluded.
The prospect of new tax cuts under a potential second Trump administration is a complex issue with significant economic implications. While President Trump made numerous tax-related promises during his campaign, the feasibility of enacting them hinges on several factors, including Congressional support and budgetary constraints.
Representative Jason Smith, a key figure in tax policy discussions, acknowledges the challenge. “Any new tax cut,providing any not part of the policy baseline,I believe will have to be offset,” he stated. Smith, who chairs the house Ways and Means Committee, emphasized the need for fiscal responsibility, suggesting that new tax cuts would likely require corresponding revenue-generating measures.
“When you look at all the proposals the president made … things he campaigned on and would be new additions, we would need to figure out ways to pay,” Smith added.
Corporate and Small Business Priorities
Among the priorities on the table are several corporate tax provisions set to expire at the end of 2025. These include measures related to research and progress expenses, bonus depreciation, and interest expense. Trump has also expressed a desire to lower the corporate tax rate to as low as 15%,a prospect Smith deemed less certain.
“I am confident the tax rate will stay at 21%,” Smith said, reflecting the view of many tax experts that the current rate is likely to remain stable.
Smith expressed greater urgency regarding the small business tax rate under Section 199A of the tax code, which is scheduled to expire in 2025. This provision, utilized by the vast majority of small businesses, is crucial for their tax deductions. Its expiration would considerably increase the average tax rate for small businesses.
“We can’t let that happen,” Smith said. “I have to get 217 votes out of the House and make sure at least 51 in the Senate and if I rule anything out it gets harder.”
He highlighted the importance of making Section 199A permanent, citing its positive impact on the economy.
Tariffs and the Budget Equation
Some have suggested using new tariffs as a means to offset the cost of potential tax cuts. Smith indicated that all options are being considered, emphasizing the need for a balanced approach.
“Everything is on the table” when he is looking at ”how to thread the needle,” smith said.
Though, incorporating tariffs into the budget equation presents its own set of risks and complexities.
as the clock ticks down on the 2017 Tax Cuts and Jobs Act, a looming fiscal cliff threatens to impact millions of Americans. Key provisions of the legislation, including individual tax breaks and the controversial SALT deduction cap, are set to expire at the end of 2025, potentially leading to a significant tax hike for many.
Rep. Jason Smith, chairman of the House Ways and Means Committee, acknowledges the urgency of the situation. “If Congress doesn’t act, every single American will face a tax increase,” he warned, citing changes to the guaranteed deduction, child tax credit, and individual tax rates.
Smith, a Republican from Missouri, faces a complex challenge in navigating the political landscape to extend or modify these expiring provisions. He must contend with a narrow Republican majority in the House and the potential for opposition from Democrats.
“Seventy percent of the expiring tax provisions are on the individual side,” smith noted, highlighting the widespread impact of inaction.
One particularly contentious issue is the SALT (State and Local Tax) deduction, which was capped at $10,000 in the 2017 law. While Smith recognizes the importance of addressing this issue, he acknowledges the fiscal constraints. “A full reversal on the cap would be cost prohibitive,” he said.
“I will look for a ‘middle of the road’ on the cap,” Smith stated. ” $10,000 is not satisfactory for my colleagues from New York, New Jersey, and California, and so it’s a threading of the needle but I don’t know what that number will be, but SALT will be a big part of the discussion.”
Adding to the complexity, Smith must also contend with a lack of experience within his committee. Only five GOP members, including Smith himself, were part of the committee in 2017 when the Trump tax cuts were passed. This lack of institutional knowledge presents an additional hurdle in crafting effective tax legislation.
The coming months will be crucial as lawmakers grapple with these expiring tax provisions. The decisions made will have far-reaching consequences for American taxpayers.
## Expert Interview: jason Smith on Tax Cuts and the GOP Agenda
**world Today News: ** Congressman Smith,thank you for joining us today. A major debate is brewing in washington over President Trump’s legislative agenda. What is your stance on his proposed tax cuts and how best to achieve them?
**Jason Smith:** The economy is strong, and we need to keep it that way. President Trump’s tax cuts in 2017 stimulated growth and created jobs, and we need to build on that success. I believe a single, extensive reconciliation bill encompassing the president’s priorities – including tax cuts, energy, immigration, and more – is the most effective way to achieve this.
**WTN:** This approach differs from Senator Thune’s suggestion to split these priorities into multiple bills. Why do you believe a single bill is preferable?
**JS:** We have a narrow majority in the House, and splitting these priorities weakens our negotiating position. Splitting the bill breeds failure. Historical precedent demonstrates that prosperous reconciliation bills have encompassed broad, impactful legislation.
**WTN**: Many are concerned about the potential impact of tax cuts on the deficit, especially given the recent Congressional Budget Office report projecting a $4.6 trillion increase in national debt from extending the expiring 2017 tax cuts. How do you address these concerns?
**JS:** Let’s be clear: extending existing tax policy is not “new spending.” The 2017 tax cuts fueled a strong economy, leading to record high corporate tax revenue and exceeding projected revenue figures. Our goal should be controlling expenditures, not raising taxes on hardworking Americans.
**WTN:** But wouldn’t new tax cuts require new revenue sources to offset their impact on the deficit?
**JS:** Any new tax cuts, beyond extending existing policy, will likely require corresponding revenue-generating measures.
**WTN**: President Trump has stated a desire to lower the corporate tax rate to 15%. Is this a realistic goal?
**JS:** I am confident the corporate tax rate will remain at 21%.Following the 2017 tax cuts, most experts agree that the current rate is likely stable.
**WTN**: What about small business tax rates under Section 199A? Its expiration in 2025 would significantly impact many businesses.
**JS:** Making Section 199A permanent is crucial to maintaining a healthy small business sector.These businesses are the engines of our economy. We can’t afford to let this provision expire.
**WTN:** Some have suggested using tariffs to offset the cost of tax cuts. What are your thoughts on that approach?
**JS** We need to carefully consider all options, but tariffs can have unintended consequences. We must prioritize policies that promote economic growth and create jobs without harming American businesses and consumers.
**WTN:** Thank you for your insights, Congressman Smith.
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**JS:** Thank you for having me.
