Feb 16, 2024 - Politics & Policy

Exclusive: Jason Smith urges GOP senators to get behind $78 billion tax deal

 (Photo by Drew Angerer/Getty Images)

(Photo by Drew Angerer/Getty Images)

As the end of tax season draws closer, the top House GOP tax writer is making rounds on the Senate side to build the case for a bipartisan tax cuts bill.

Why it matters: This is an early salvo in the "Super Bowl of tax" that's expected to come in 2025 when the Trump-era tax cuts expire.

  • A $78 billion bipartisan deal cutting taxes for business expensing and bolstering the child tax credit easily passed the House, but is stalled out by Senate GOP opposition.
  • House Ways and Means Chairman Jason Smith (R-Mo.) is hustling to get a bipartisan tax bill over the finish line in the Senate before the end of filing season, hoping it can go into effect this year.
  • "I'm constantly navigating and meeting with Republican senators to answer any questions that they have," Smith told Axios in an interview, noting Senate Majority Leader Chuck Schumer (D-N.Y.) has called for its passage.

Between the lines: Smith said that crafting the bill wasn't easy, adding that it was a team effort alongside Ways and Means Ranking Member Richie Neal (D-Mass.), Senate Financial Services Chairman Ron Wyden (D-Ore) and Ranking Member Mike Crapo (R-Idaho).

Zoom in: The bill is facing some pushback from GOP senators who are concerned with a provision on the employee retention tax credit (ERC) which would be used to pay for the cuts, with some calling for significant changes.

  • But Smith is calling for senators to rally around the measure, noting concessions were made during initial negotiations.
  • "When we first originally started out it was going to be $47 billion on the business and $47 billion on the child tax credit and Senate Republicans said no, it needs to be around $30 billion and so that's why we moved it down to $30 on each side," he said.
  • Smith also noted that they lowered the look-back — which allows for claims for a credit or refund from previous years — from three years to two years.

The big picture: While the House-passed bill would extend provisions through the election, the larger tax fight is expected in 2025.

  • Smith argues that passing the bipartisan tax package will help ease the process when they need to extend the Trump tax cuts.
  • "For one it breaks the dam. There has not been any kind of even a small extenders package passed in three years and let alone in divided government. And so 2025 is the Super Bowl of tax," he said.
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