Every new administration and Congress wants a fast win, and extending the 2017 Tax Cuts and Jobs Act (TCJA) — albeit with some twists — looks to be a good bet for the first major achievement of the second Trump administration.
But for family businesses, it’s not enough to have short-term tax wins. These can be wiped away in the next election. The real victory is when positive tax laws are made permanent and are consistent over the long haul. New House and Senate bills, as well as my conversations with Capitol Hill experts and the chairs of the House Ways and Means Committee Tax Teams, all point to such a win.
But nothing is ever simple on Capitol Hill.
‘Certainty and Permanency’
Recently, I spoke with several staff members for leaders of the House Ways and Means Committee Tax Teams (the people responsible for writing these new tax laws). I asked them if consistency and permanency will be part of our new tax laws. Consistency and permanency allow family businesses, the largest private employer in America, to plan investments, manage hiring and create an investing atmosphere that helps the overall American economy for the long term.
The staff members (the people who do the nitty-gritty tax writing work) work for, among several others, Rep. Vern Buchanan (R-Fla.), Chair of the “American Manufacturing” Tax Team; Rep. Darin LaHood (R-Ill.), Chair of the “American Workforce” Tax Team; Rep. Mike Kelly (R-Pa.), Chair of the “Community Development” Tax Team; and Rep. Lloyd Smucker (R-Pa.), Chair of the “Main Street” Tax Team.
Their message, and priorities, were clear: “We need a tax code to help family businesses operate with certainty and permanency.”
Family businesses will have to wait and see whether this comes true, but at least our lawmakers are aware of the importance of these factors. They are also keenly aware of specific issues like income taxes remaining at the same or lower rates, the estate tax remaining the same or at higher exemption levels, the extension of 199A provision (intended to help ensure business owners pay tax rates that are more comparable to the corporate tax rate reduced by the TCJA), and restoring research and development expensing.
With tax code stability a key factor, they also understand that, by extending much of the TCJA, the country runs the risk of increasing the national debt by over $4 trillion, another big issue family businesses worry about, according to our research.
This makes for an unenviable balancing act.
In the last 90 days, the tax bill writing process has gone from listening and feedback sessions, final drafting, mark-ups and coordination with the Senate, to House and Senate Floor consideration.
As advocates for family businesses, family offices and successful individuals, we also submitted a statement for the record that detailed the need for family businesses to rely on consistent, permanent tax policy.
To help move things along, new bills have also been introduced in the House and Senate.
New Measures
House Member Rep. Jodey C. Arrington (R-Texas) introduced H.R. 601 to amend the Internal Revenue Service code of 1986 to reduce the rate of taxation on estates, gifts and generation-skipping transfers. The amendment is receiving bipartisan House support with co-sponsor Rep. Sanford D. Bishop (D-Ga.).
In the TCJA, the modified IRS tax code doubled the federal estate, gift and generation-skipping transfer tax exemption from $5.5 million per person to $11.2 million in 2018. The current level is $13.6 million per person. However, if changes are not made by Congress, the estate tax, often referred as the “death tax,” could reset to approximately $7 million. Without changes to the tax code, any estate, gift or generation-skipping transfers that exceeds the exemption amount will be taxed at the federal level of 40%, with some states additionally taxing those amounts up to 16%.
In addition, House Member Rep. Lloyd Smucker (R-Pa.) and Sen. Steve Daines (R-Mont.) have introduced bills to permanently extend Section 199A in the Internal Revenue Code to keep the 20% deduction for pass-through business entities. The two bills, presented to the House of Representatives and Senate, respectively, were introduced on the same day, January 23, 2025.
Over 80% of family businesses, according to Family Enterprise USA research, are structured as pass-through entities. Pass-throughs have been disadvantaged by corporate tax rates set at 15%, versus pass-through entity rates that could go as high as 43% next year. Section 199A was designed in the TCJA to level the tax playing field between pass-through entities and traditionally larger corporations.
Rep. Smucker, a senior member of the tax-writing House Ways and Means Committee, re-introduced his Main Street Tax Certainty Act to the House of Representatives with co-sponsorship by 152 House Members, representing two-thirds of the House Republican Conference. It is the most co-sponsored tax bill introduced so far this session.
At the same time, U.S. Sen. Steve Daines, along with Senate Majority Leader John Thune (R-S.D.), and 33 Republican Senators, also introduced to the Senate the “Main Street Tax Certainty Act” to make the 20% pass-through business tax deduction (199A) permanent.
Both Rep. Smucker and Sen. Daines noted in their bills that, should these tax cuts expire, small and large family businesses will be dramatically hurt.
With the introduction of his bill, Rep. Smucker says he was seeking to promote equity in America’s tax code between family businesses on Main Street and larger corporations.
“When small businesses thrive, our communities thrive,” says Rep. Smucker. “Small businesses need predictability and making Section 199A permanent will provide Main Street with the certainty they need to invest in their workforce, operations, and community. This pro-growth policy will ensure small businesses maintain tax parity with larger corporations.”
Without these changes, he says, family businesses will “face an immediate and massive tax hike.”
Hill Insider Insights
I also spoke with our bipartisan Capitol Hill tax and economic policy insiders, both prominent and well known, to get their reading on things.
They are Caren Street, principal and legal expert at the law and government-relations firm Squire Patton Boggs, and Mark Warren, shareholder and legal expert, at the law and government-relations firm Brownstein.
Street has 17 years of experience on Capitol Hill and in government relations while Warren has worked on every major tax-policy debate since the Clinton administration. He also contributed to the development and drafting of key parts of the TCJA as senior tax counsel in the office of Sen. John Thune (R-S.D.).
Both agree it’s still “early days,” and policy gyrations and negotiation acrobatics are inevitable.
“The first real issue Congress will face is funding the government in March,” says Street, a Democrat. “This will probably need to be bipartisan.”
Warren, a Republican, agrees, saying that “tax and reconciliation will move on their own tracks, but first the government has to be funded.”
Street believes the cost of the TCJA extensions will “push Democrats away, and so this won’t be a bipartisan issue, but if it becomes a long, drawn-out process it could become more bipartisan.”
Warren does, however, see some bipartisan hope.
“There are 11 Democrats willing to work with Republicans, but I have to agree that this will all be incredibly difficult.”
Both experts agree that no one in Congress wants to go home in January 2026 and explain why their constituents’ taxes have gone up.
We’ve urged the House Ways and Means Committee, its Tax Team co-chairs and members and all members of Congress to take into consideration our positions on tax policy, which include the following priorities:
- Lower the top income tax rate and personal income taxes
- Lower the estate tax rate and increase lifetime exemption
- Decrease the top capital gains tax rate
- Continue 199A for pass-through entities
- Restore R&D expensing
- Continue like-kind exchanges and accelerated depreciation
- Eliminate consideration of wealth tax or surtax on income
- Continue valuation of discounts for estate tax purposes
- Continue grantor trusts
- Avoid elimination of step-up in basis
- Restore bonus depreciation
We believe they are listening.
Congressional Family Business Caucus: Women-owned Family Businesses
The year’s first Congressional Family Business Caucus is focused on women-owned family businesses.
The Caucus, held March 11 on Capitol Hill, will discuss the strength of women-owned businesses and the special challenges they face.
Top women business leaders attending include Debbie McKee of Little Debbie Cakes, Cheryl Osborn of Casco Contractors and Global 1st Flagship’s Sherri Bovino.
The Congressional Family Business Caucus is a bipartisan, educational caucus intended to bring awareness to the issues facing family businesses. Last year, the caucus was co-chaired by Reps. Arrington, Brad Schneider (D-Ill.), Claudia Tenney (R-N.Y.) and Henry Cuellar (D-Texas). It has approximately 50 members and, with each new Congress a new set of co-chairs will be assembled and announced. We will keep you posted.
In addition, Family Enterprise USA has formed the new Women’s Business Owners Group, a coalition dedicated to addressing the challenges women-owned businesses face.
The group’s mission is to “amplify the voices of women entrepreneurs, foster collaboration, and advocate for policies that promote business.”
Women-owned businesses represent nearly 40% of all U.S. businesses — more than 14 million businesses in total – and account for $2.7 trillion in revenue, according to Wells Fargo Bank’s 2024 “Impact of Women-Owned Business Report.”
The goal here is to also educate our lawmakers on the importance of women-owned businesses and to discuss them in the context of broader family-owned business issues.
Now, more than ever, women-owned businesses deserve a seat at the policymaking table. This can only help keep our legislators committed to supporting all family businesses, and ensuring our tax and economic policies remain in line with the goals of growth and increased investment.