House Committee Approves ‘Tax Reform 2.0’ Bills

Today the House Ways and Means Committee approved three bills referred to collectively as “tax reform 2.0.” These bills are a follow-up to the tax reform law that Congress passed and President Trump signed into law in late 2017.

The first bill, H.R. 6760, makes tax policies contained in the tax reform law permanent. (The provisions in the law that pertain to individuals are currently set to expire after 2025, including the 20 percent deduction for pass-through businesses such as banks organized as S-corporations.) The second bill, H.R. 6757, makes several changes to retirement and educational savings accounts to ease their use and also creates new Universal Savings Accounts. Taxpayers could contribute up to $2,500 each year to their USA. Earning and distributions would be tax-free. The third bill, H.R. 6756, would allow new businesses to more quickly deduct their start-up costs.

The American Bankers Association maintains that making permanent the 20 percent deduction for pass-through businesses would be beneficial for S-banks, as there are currently uncertainties around what tax rate will be applicable to those businesses in future years.