WASHINGTON, D.C. — The United States Joint Economic Committee (JEC) hosted a hearing on Tuesday, November 19, to discuss the expiration of several 2017 Tax Cuts & Jobs Act (TCJA) provisions. 

To put things into perspective, the House Committee on Ways & Means outlined potential consequences if Congress fails to renew the TCJA: 

• 207 million taxpayers in the United States will see an average tax hike of 22 percent.
• The average family of four making the national median income will see a tax hike of $1,695.
• The Guaranteed Deduction will be cut in half.
• The Child Tax Credit will be slashed from $2,000 to $1,000.

This will result in tax rate increases for every American.

“How do we focus on economic expansion in terms of the tax code– particularly knocking down barriers that prevent us from adopting innovation?” asked Congressman Schweikert. 

Yesterday’s witnesses– former ChairmanKevin Brady and former CBO Director Dr. Douglas Holtz-Eakin– explained how we can use the tax code to incentivize a better, faster, and cheaper way to make our brothers and sisters healthier.

“A tax code done right is a force for good,” said Chairman Brady. Brady advised the committee to seize the opportunity to build on the gains made in TCJA that led to higher paychecks, lower poverty, global competitiveness and robust economic growth. Brady cited real wage growth of more than $6,000 during the years of 2017-2018, and how that growth alone resulted in dramatic benefits of breaking the cycle of poverty.

“It’s all about improving upon locking in program provisions like the pro-growth rate,” said Chairman Brady, “and making permanent incentives for innovation, expensing for R&D, and the past definition for interest deducibility because of their [importance] to job opportunities and rising paychecks.”

Dr. Holtz Eakin explained the importance of disrupting incumbent business models by keeping tax reform broad.

“Everyone wants to embrace change… [until] it affects their certain silo,” said Holtz-Eakin. “A process of genuinely innovative, broadly accessibly tax reform is completed by creating as few silos as possible.”

Holtz-Eakin also suggested changes that reflect growth and development of our society since TCJA’s inception in 2017. He argued that a deficit-neutral reform from the current law baseline, which would allow not only progress to be made regarding the current fiscal burden, but it would also allow Congress to make tax policy permanent and thus, much more effective.

Next year, our task is to devise a dynamic tax code that cultivates American ingenuity and innovation, not one that holds it back. The United States has a long history of encouraging entrepreneurship, business creation, and innovation. The New Economy Tax Team, under the leadership of Congressman Schweikert, has hosted several future-facing roundtables, examining the tax code to ensure it complements the building of the New Economy that supports gig workers and the self-employed, the digital economy, and the adoption of productivity-enhancing technologies, in preparation for the upcoming 2025 tax cliff.

With hearings hosted by the U.S. Joint Economic Committee alongside Ways and Means Tax Teams under the leadership of Chairman Jason Smith, Republicans will continue to uphold the promise of developing legislative proposals that build on the success of the Tax Cuts and Jobs Act by devising a tax code that prioritizes economic growth, fiscal responsibility, and financial well-being for all.

Click here to see what other members of the House Ways and Means Committee have to say about what tax increases could mean for Americans across every community. 

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Congressman David Schweikert serves on the Ways and Means Committee and is the current Chairman of the Oversight Subcommittee. He is also the Vice Chairman on the bicameral Joint Economic Committee, chairs the Congressional Valley Fever Task Force, and is the Republican Co-Chair of the Blockchain Caucus, Telehealth Caucus, Singapore Caucus, and the Caucus on Access to Capital and Credit.

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