House Ways and Means Committee Chairman Kevin Brady (R-TX) has circulated three documents providing additional details regarding the Tax Reform 2.0 package that will focus on: (1) making permanent individual and small business tax cuts under the Tax Cuts and Jobs Act that expire at the end of 2025; (2) promoting savings for families and retirement; and (3) promoting entrepreneurship.

The documents were circulated as House Republicans were conducting a listening session on the forthcoming package on September 6, which Majority Whip Steve Scalise (R-LA) said he would be leading with Chairman Brady. Chairman Brady has said the package will be released and marked up next week, and Speaker Paul Ryan (R-WI) said the House will vote on the package "at the end of the month."

The document on "Protecting Middle Class and Small Business Tax Cuts" said "family-friendly" provisions that will be locked in with Tax Reform 2.0 include:

— Lower tax rates

— A doubled Child Tax Credit that is available to many more families

— Establishing the first ever Paid Family Leave Tax Credit

— Elimination of the Alternative Minimum Tax for nearly 96% of those who paid it last year

— Doubled exemption from the Death Tax

It does not mention making permanent the TCJA's $10,000 annual limit on the amount of state and local taxes (SALT) an individual can deduct, which some Republicans do not want to act on before the midterm elections. Chairman Brady previously said the SALT cap would be extended under Tax Reform 2.0.

The document on "Promoting Family Savings" said Tax Reform 2.0 retirement savings provisions include those:

— Allowing small businesses to join together to create a 401(k) plan more affordably

— Giving employers more time to put new retirement plans in place

— Simplifying the rules for participation in employer plans

— Exempting small retirement accounts from mandatory payouts

— Eliminating the age limit on IRA contributions

— Allowing military reservists to maximize their retirement contributions

The savings document otherwise restates proposals included in the initial Tax Reform 2.0 Framework released on July 24. In the category of "Family-Friendly Savings Plans," the package will propose a new Universal Savings Account to offer a "fully flexible savings tool for families." The package would also allow Section 529 plans to be used to pay for apprenticeship fees to learn a trade, cover the cost of home schooling, and help pay off student debt. Families would be allowed to access their retirement accounts penalty-free for expenses upon the birth or adoption of a child, and to replenish the accounts in the future.

The "Growing Brand-New Entrepreneurs" document said as part of an annual focus on encouraging innovation, Tax Reform 2.0 will help brand-new businesses with startup costs and capital by:

— Allowing new businesses to write off more of their initial start-up costs

— Allowing start-ups to expand by bringing in new investors without triggering limits on their access to tax benefits like the R&D credit for activities conducted in their early years

The documents are attached.

———————————————

———————————————
ATTACHMENT

Growing Brand-New Entrepreneurs

Promoting Family Savings

Protecting Family Tax Cuts