With the debt ceiling conversation turned from a crisis to simply the elephant in the room, House Republicans have turned their attention to proposing tax bills and future budgets. Two recent Republican actions give us insight into their agenda.
New Proposed Tax Bill Unlikely to Become Law
They have packaged three bills together into the American Families and Jobs Act .
The Tax Foundation, a nonprofit focusing on tax policy, did a very nice 15-minute read called, “Details and Analysis of the American Families and Jobs Act ” summarizing what is included in the bills. Although, they start the piece making clear:
The combined House GOP tax package is roughly revenue neutral, and, though unlikely to become law, it shows that improving incentives for businesses to invest in the U.S. is a key priority for lawmakers.
By examining the bills, it becomes evident that Republicans are focused on expiring business expense laws and the bonus depreciation rules. However, they still show a preference for the use of expiring tax policy. While this approach may facilitate revenue neutrality on paper, it may come at the expense of real-world economic stability.
Hopefully future proposals will look towards more permanent solutions to provide us all with more certainty of what the future will look like.
Republican’s 2024 Budget Proposal Shows Agenda
Another Tax Foundation article called, “Republican Study Committee’s Tax Plan Simplifies the Tax Code and Offers Pro-Growth Ideas ” summarizes the recent 2024 FY budget proposal generated by the Republican Study Committee.
The bullet point summary of the big highlights in the proposal are:
- making features of the Tax Cuts and Jobs Act permanent
- eliminating the State and Local Tax (SALT) deduction entirely
- making business’s bonus depreciation and accelerated depreciation permanent
- creating universal savings accounts, which, in the words of the proposal, “would allow some of the savings of American families, already taxed twice through income taxes, to avoid a third round of taxation through capital gains.”
- adjusting the second long-term capital gains bracket to start at $75,000 for single filers and $150,000 for Joint filers (vs the current $44,625 and $89,250)
- indexing capital gains taxes to inflation
- eliminating death taxes
- opposing Democrats’ attempts to effectively eliminate Donor Advised Funds (DAF)
This proposal document can be likened to a party platform. We’ll have to wait and see both what our politicians remain committed to in the future and what they really mean by these lofty goals.
As we have previously discussed, the outcome of our upcoming elections will have significant implications for the future of our tax system. For further information on this subject, you may enjoy the articles “2026 Tax Cliff on Horizon” and “Federal Debt Burden May Settle 2026 Tax Uncertainty.”
Photo by Nicole Avagliano on Unsplash. Image has been cropped.