Republicans hurry to finalize Trump's tax legislation
Before scheduling a vote on the tax cuts, House tax writers must address several significant questions.
TroibNews 
House Republicans are racing to finalize President Donald Trump’s tax bill by Memorial Day. However, the effort is expected to be challenging.
Treasury Secretary Scott Bessent will reconvene the "Big Six" discussions on the GOP tax bill this week, engaging with House Speaker Mike Johnson, Senate Majority Leader John Thune, and the tax leaders from Congress. In addition, GOP leaders are scheduled to meet on Wednesday with a focused group of Republicans who have expressed their intention to complicate the legislation unless there's an expansion of the state and local tax (SALT) deduction.
This urgency arises as GOP lawmakers begin outlining a tax package that includes trillions of dollars in provisions central to Trump's "big beautiful bill." The legislation is anticipated to allocate over $100 billion for immigration enforcement, increased defense spending, and various energy initiatives related to oil and gas production.
Trump has urged Congress to make his expiring 2017 tax cuts, which predominantly impact individuals, permanent and to introduce a range of new tax breaks for domestic manufacturers, tipped wages, and auto loans, among others. Generally, Senate and House Republicans are aligned on the goal of advancing this expensive agenda.
However, significant disparities exist between the tax plans developed by the two chambers, and there are substantial risks of conflict as deficit-conscious House members insist that any tax reductions should be accompanied by significant, politically fraught spending cuts.
Kickoff for votes: The tax-writing House Ways and Means Committee, led by Chair Jason Smith, needs to begin drafting its proposal in the upcoming weeks. Smith remarked on NewsNation's “The Hill Sunday” that he anticipates "we're days away, not months away, from delivering this for the American people."
The committee still faces critical decisions and remains vague about when it will mark up the bill, even as House GOP leadership has been urging Smith to establish dates in early to mid-May.
Committee member Darin LaHood indicated on Friday that a vote might not happen until early June.
There are many factors suggesting that LaHood's timeline might be more realistic. The House Republican budget proposes $4.5 trillion in tax cuts, dependent on the GOP's ability to manage $2 trillion in spending reductions.
Tax writers are likely waiting to see how much savings other committees can achieve, particularly the House Energy and Commerce Committee, which has been assigned the majority of the savings.
“For Ways and Means, the biggest outstanding question is, what is the number that they’re writing to?” stated Rohit Kumar, National Tax Office Co-Leader at PwC and a former senior aide to Sen. Mitch McConnell.
Kumar elaborated that Smith “doesn’t have a fixed target. He either has to wait for the other committees to do their work to have a sense of what their number is, or he has to make a guess about what number they’re going to get to.”
Controlling costs: The expenses associated with the tax plan have created friction for several months. Nonpartisan budget analysts have projected that extending expiring tax cuts, including the reduced individual rates established in 2017, would cost around $4 trillion.
Trump and many GOP legislators aim to cement these cuts as permanent. However, Smith has noted that with the additional tax measures requested by Trump, the plan might only accommodate eight to nine years of tax cut extensions.
Republicans also seek to reinstate expired tax incentives for business equipment and research and development projects permanently, which could add hundreds of billions more in costs to the tax plan. Trump’s proposals for tax relief for seniors and overtime pay could also prove to be costly, depending on the specifics decided by the committee.
Ways and Means has conducted thorough discussions among its members to evaluate their perspectives on potential adjustments that could decrease the overall cost of the tax proposal. Some ideas being considered include limits on executive compensation deductions for businesses, restrictions on write-offs for corporate state and local taxes, and increased taxes on university endowments.
Certain House Republicans, like Rep. Chip Roy, are pressing the committee to reduce green energy credits, even as over 20 GOP members advocate for their preservation.
In a recent statement on "The Hugh Hewitt Show," Smith mentioned that his committee is exploring every available option to generate revenue to lessen the financial burden of making Trump’s tax cuts permanent.
“House Ways and Means Republicans, we put in more than 50 hours in the last six weeks trying to craft this bill and looking at every provision… How could it be enhanced? Is this a provision that we don’t need, whether it’s an IRA credit?” Smith said, referring to the Democrats' 2022 Inflation Reduction Act. “We’re looking at all kinds of things to close that area. We have to make permanent Trump’s expiring 2017 tax cuts.”
The Senate plan: Conversely, Senate Republicans have proposed their own strategy that aims to offset the costs of permanently extending the expiring tax cuts by utilizing an accounting method called “current policy baseline.” Their overall plan would allow for approximately $800 billion in additional tax reductions while establishing very minimal targets for spending cuts from the committees.
Thune and Finance Committee Chair Mike Crapo have been at the forefront of efforts to make the 2017 cuts permanent and employ the current policy baseline, despite some House Republicans criticizing this accounting approach as a gimmick.
More SALT: As is typical with major tax reforms, congressional members have their own specific preferences to champion. In March, Crapo stated he has received about 200 requests from fellow senators.
However, no single issue has been more challenging to address than the $10,000 cap on the state and local tax deduction, commonly known as SALT, established by Congress in 2017.
House leaders are preparing to convene on Wednesday with lawmakers advocating for an increase in the cap, representing politically competitive districts with high property taxes negatively affecting their constituents under the existing limit.
Indications suggest that the Ways and Means Committee has a proposed number for a SALT cap increase, although it’s uncertain if staunch SALT Republicans like New York Reps. Nick LaLota, Mike Lawler, and Andrew Garbarino will be satisfied by this proposal.
“The 2025 political landscape is far different from 2017 and our party needs Blue State Republicans’ votes” to pass the Trump policy package, LaLota stated in an email. “Our price will be a reasonable increase in the SALT cap— it’s a matter of fairness, political pragmatism, and simple vote math.”
Mark B Thomas for TROIB News
Treasury Secretary Scott Bessent will reconvene the "Big Six" discussions on the GOP tax bill this week, engaging with House Speaker Mike Johnson, Senate Majority Leader John Thune, and the tax leaders from Congress. In addition, GOP leaders are scheduled to meet on Wednesday with a focused group of Republicans who have expressed their intention to complicate the legislation unless there's an expansion of the state and local tax (SALT) deduction.
This urgency arises as GOP lawmakers begin outlining a tax package that includes trillions of dollars in provisions central to Trump's "big beautiful bill." The legislation is anticipated to allocate over $100 billion for immigration enforcement, increased defense spending, and various energy initiatives related to oil and gas production.
Trump has urged Congress to make his expiring 2017 tax cuts, which predominantly impact individuals, permanent and to introduce a range of new tax breaks for domestic manufacturers, tipped wages, and auto loans, among others. Generally, Senate and House Republicans are aligned on the goal of advancing this expensive agenda.
However, significant disparities exist between the tax plans developed by the two chambers, and there are substantial risks of conflict as deficit-conscious House members insist that any tax reductions should be accompanied by significant, politically fraught spending cuts.
Kickoff for votes: The tax-writing House Ways and Means Committee, led by Chair Jason Smith, needs to begin drafting its proposal in the upcoming weeks. Smith remarked on NewsNation's “The Hill Sunday” that he anticipates "we're days away, not months away, from delivering this for the American people."
The committee still faces critical decisions and remains vague about when it will mark up the bill, even as House GOP leadership has been urging Smith to establish dates in early to mid-May.
Committee member Darin LaHood indicated on Friday that a vote might not happen until early June.
There are many factors suggesting that LaHood's timeline might be more realistic. The House Republican budget proposes $4.5 trillion in tax cuts, dependent on the GOP's ability to manage $2 trillion in spending reductions.
Tax writers are likely waiting to see how much savings other committees can achieve, particularly the House Energy and Commerce Committee, which has been assigned the majority of the savings.
“For Ways and Means, the biggest outstanding question is, what is the number that they’re writing to?” stated Rohit Kumar, National Tax Office Co-Leader at PwC and a former senior aide to Sen. Mitch McConnell.
Kumar elaborated that Smith “doesn’t have a fixed target. He either has to wait for the other committees to do their work to have a sense of what their number is, or he has to make a guess about what number they’re going to get to.”
Controlling costs: The expenses associated with the tax plan have created friction for several months. Nonpartisan budget analysts have projected that extending expiring tax cuts, including the reduced individual rates established in 2017, would cost around $4 trillion.
Trump and many GOP legislators aim to cement these cuts as permanent. However, Smith has noted that with the additional tax measures requested by Trump, the plan might only accommodate eight to nine years of tax cut extensions.
Republicans also seek to reinstate expired tax incentives for business equipment and research and development projects permanently, which could add hundreds of billions more in costs to the tax plan. Trump’s proposals for tax relief for seniors and overtime pay could also prove to be costly, depending on the specifics decided by the committee.
Ways and Means has conducted thorough discussions among its members to evaluate their perspectives on potential adjustments that could decrease the overall cost of the tax proposal. Some ideas being considered include limits on executive compensation deductions for businesses, restrictions on write-offs for corporate state and local taxes, and increased taxes on university endowments.
Certain House Republicans, like Rep. Chip Roy, are pressing the committee to reduce green energy credits, even as over 20 GOP members advocate for their preservation.
In a recent statement on "The Hugh Hewitt Show," Smith mentioned that his committee is exploring every available option to generate revenue to lessen the financial burden of making Trump’s tax cuts permanent.
“House Ways and Means Republicans, we put in more than 50 hours in the last six weeks trying to craft this bill and looking at every provision… How could it be enhanced? Is this a provision that we don’t need, whether it’s an IRA credit?” Smith said, referring to the Democrats' 2022 Inflation Reduction Act. “We’re looking at all kinds of things to close that area. We have to make permanent Trump’s expiring 2017 tax cuts.”
The Senate plan: Conversely, Senate Republicans have proposed their own strategy that aims to offset the costs of permanently extending the expiring tax cuts by utilizing an accounting method called “current policy baseline.” Their overall plan would allow for approximately $800 billion in additional tax reductions while establishing very minimal targets for spending cuts from the committees.
Thune and Finance Committee Chair Mike Crapo have been at the forefront of efforts to make the 2017 cuts permanent and employ the current policy baseline, despite some House Republicans criticizing this accounting approach as a gimmick.
More SALT: As is typical with major tax reforms, congressional members have their own specific preferences to champion. In March, Crapo stated he has received about 200 requests from fellow senators.
However, no single issue has been more challenging to address than the $10,000 cap on the state and local tax deduction, commonly known as SALT, established by Congress in 2017.
House leaders are preparing to convene on Wednesday with lawmakers advocating for an increase in the cap, representing politically competitive districts with high property taxes negatively affecting their constituents under the existing limit.
Indications suggest that the Ways and Means Committee has a proposed number for a SALT cap increase, although it’s uncertain if staunch SALT Republicans like New York Reps. Nick LaLota, Mike Lawler, and Andrew Garbarino will be satisfied by this proposal.
“The 2025 political landscape is far different from 2017 and our party needs Blue State Republicans’ votes” to pass the Trump policy package, LaLota stated in an email. “Our price will be a reasonable increase in the SALT cap— it’s a matter of fairness, political pragmatism, and simple vote math.”
Mark B Thomas for TROIB News
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