Witnesses have been announced for today's (December 3) House Ways and Means Tax Subcommittee hearing on "Promoting Global Competitiveness for American Workers and Businesses," which is to focus on "the importance of pro-growth international tax policy to promote capital investment and to create more high-quality jobs in the United States." They are:

• Former Ways and Means Committee Chairman Kevin Brady
• Bret Wells, Professor of Law at University of Houston Law Center
• Agnes Webb, Vice President of Tax at Sylvamo
• Kimberly Clausing, Professor of Tax Law and Policy at UCLA

Lawmakers have remained interested in progress on a side-by-side system that would exempt US multinationals from certain Pillar Two global minimum tax rules and have been concerned about digital services taxes (DSTs). There is also continued speculation that Republicans may revive the Section 899 reciprocal tax proposal, which was dropped from the "One Big Beautiful Bill Act" (OBBBA) after G7 nations made a statement supportive of such a side-by-side system.

In June, Chairman Brady made comments supportive of the Section 899 retaliatory tax provision, saying it is intended as a deterrent and would help restore congressional authority over the US tax system in the OECD-led global negotiations.

Wells testified at the Senate Finance Committee in 2017 and said residency taxation principles like the US subpart F regime only protect against profit-shifting by US-based multinational companies, and recommended source taxation anti-base erosion measures that apply equally to US-based and foreign-based multinationals. A 2023 Wells paper, "Enigma of the United States, Base Erosion, and the Global Minimum Tax," attempts to "identify those areas where the Pillar 2 model rules are deficient and where further reforms to the GloBE rules are necessary to ensure achievement of the agreed-upon aspirational goal."

Clausing, a former Biden Treasury official, published a 2024 paper, "US International Corporate Taxation after the Tax Cuts and Jobs Act," that argued, "While TCJA was unable to resolve the tension between competitiveness and tax base protection, the Pillar 2 international tax agreement shows more promise in that regard. As countries throughout the world implement a 'country-by-country' minimum tax on multinational income of 15 percent, this has the potential to disrupt long-standing arguments about international corporate taxation."

Separately on international tax, a Bloomberg Daily Tax Report story, "GOP 2025 Tax Law Changes to US Minimum Tax Hamstrung by Tax Code," reported on companies wanting Treasury to provide guidance that stewardship expenses aren't required to be allocated to their foreign-earned income. "It's another expense that if allocated to this specific 'basket' of income would hinder companies' ability to take their foreign tax credit. Before the new tax law, stewardship expenses were apportioned so that some amount would be allocated to GILTI," the story said. "'From a foreign tax credit perspective, it is preferable for fewer expenses, including stewardship expenses, to be allocated to GILTI income,' said Jose Murillo, Americas international tax and transaction services leader at EY."

Senator Elizabeth Warren (D-MA) December 2 released a Joint Committee on Taxation analysis on bonus depreciation, including showing that the cost of the provision from the retroactive extension to January 20, 2025, to the date of enactment was $16 billion, which Senator Warren described as a "corporate handout."

Legislation — The House December 1 approved the following Ways and Means Committee bills:

• H.R. 4313 — Hospital Inpatient Services Modernization Act, as amended (Sponsored by Rep. Buchanan), agreed to by voice vote
• H.R. 5284 — Claiming Age Clarity Act (Sponsored by Rep. Smucker), voice vote
• H.R. 5345 — Improving Social Security's Service to Victims of Identity Theft Act (Sponsored by Rep. Kustoff), voice vote
• H.R. 5348 — Social Security Child Protection Act of 2025 (Sponsored by Rep. Smucker), passed on a 386-0 vote
• H.R. 5346 — Fair and Accountable IRS Reviews Act (Sponsored by Rep. Grothman), voice vote
• H.R. 5349 — Tax Court Improvement Act (Sponsored by Rep. Moran), voice vote

On December 1, President Trump signed H.R. 998, the "Internal Revenue Service Math and Taxpayer Help Act," which requires the Internal Revenue Service to provide specific information on a notice as a result of a mathematical or clerical error on a tax return, send a notice related to an abatement of taxes assessed due to error, and implement a pilot program for sending such notices.

The House bill was sponsored by Ways and Means member Randy Feenstra (R-IA), while the Senate companion (S. 608) was sponsored by Finance Committee member Senator Warren.

On December 1, Rep. Jake Auchincloss (D-MA) introduced a bill (H.R. 6335) to impose a tax on digital advertising services.

Health care — House Republicans may be preparing to release a proposal to respond to the situation of enhanced Affordable Care Act (ACA) premium tax credits (PTCs) expiring at the end of this month, but Speaker Mike Johnson (R-LA) pushed back on speculation from other members that the proposal would call for an extension of the enhanced credits. "We didn't commit to that. What I said is when you have — this is just practical, OK? When you have a razor-thin majority, which we have, this is not like the old days," he said during a press conference following a member meeting. "You know, in the old days they had 30-40-seat majorities. And, so, four leaders could go in a back room and create the agenda … "

Prior to Thanksgiving, House Majority Leader Steve Scalise (R-LA) said the three committees that work on health care policy — Ways and Means, Energy and Commerce, and Education and the Workforce — have been working on legislation. "We're pooling those ideas together and there will be a Republican response to this," Speaker Johnson said.

Elections — In a December 2 special election in Tennessee, Republican Matt Van Epps defeated Democrat Aftyn Behn, which will bring the House Republican majority to 220-213. The seat was open because former Rep. Mark Green (R-TN) resigned from Congress in July.

There will be additional fluctuations in the House party ratio. Rep. Marjorie Taylor Greene (R-GA) is resigning on January 5, 2026, which will drop the party ratio back down to 219-213. A January runoff for the seat of the late Rep. Sylvester Turner (D-TX) is between two Democrats, and, once settled, will make the ratio 219-214. A special election will be held in April for the seat of former Rep. Mikie Sherrill (D-NJ), who resigned once elected Governor, and the seat could be expected to stay in Democratic hands after Sherrill won by roughly 15 percentage points in 2024. That would leave a 219-215 ratio under which Republicans couldn't lose more than one of their members' votes on any party-line bill, because legislation doesn't advance on a tie vote.

Meanwhile, redistricting efforts are under way in Indiana this week seek to flip two currently Democratic seats — currently held by Reps. Frank Mrvan (D-IN) and André Carson (D-IN) — to Republican control as part of the broader effort for the GOP to retain the House majority. As the Indianapolis Star reported, "With the newly drawn Texas map in legal limbo, resistance from Kansas Republicans and successful mid-cycle redistricting efforts in California, squeezing two more red seats out of Indiana could make or break Republicans' mission to keep control of Congress."

IRS — Treasury and the Internal Revenue Service (IRS) December 2 issued Notice 2025-68 announcing upcoming regulations and providing guidance regarding Trump Accounts. "Notice 2025-68 provides a general overview of how Trump Accounts work and addresses certain initial questions about creating initial and rollover Trump Accounts, the $1,000 pilot program contribution, other contributions — including qualified general contributions and section 128 employer contributions — eligible investments, distributions, reporting, and coordination with the rules applicable to other types of IRAs," IRS said in a news release.