The first 100 days on Capitol Hill will likely see a race to complete a new tax bill, as well as to forge — and make permanent — new economic policies that will help family businesses.
Members of Congress and Washington, D.C., insiders tell us they expect the first quarter of the year to be a mad dash to finalize the extension and enhancement of the 2017 Tax Cuts and Jobs Act (TCJA), which would keep several family business-friendly policies intact, including the corporate tax and estate tax exemptions as well as the 199A provision, which helps level the tax playing field for pass-through entities,
Under the Trump administration, legislators will also be working to reinstate research and development expensing and to silence talk of an unrealized gains tax, better known as a “wealth tax.”
That's according to two House Ways and Means Committee members, Rep. Greg Steube (R-Fla.) and Rep. Claudia Tenney (R-N.Y.), as well as our Capitol Hill experts. Tenney is also an active co-chair of the Congressional Family Business Caucus.
Nearly every new presidential administration since Ronald Reagan's in 1981 has passed a tax bill in the first year of their term, and 2025 looks to be no different.
You've probably heard, but if TCJA provisions are not extended — or made permanent — individual tax rates and tax brackets will revert to previous levels, standard deductions and child tax credits will be cut in half, estate tax exemptions will revert to $7 million, the 199A deduction will expire and R&D expensing will continue to be spread over five years, along with other tax benefits.
Steube, who co-chairs the Main Street Tax Team for the House Ways and Means Committee, recently said, “We will pass new tax legislation in the House in the first quarter, and we have a year to get the new tax policies done, and we will.”
He emphasized that all provisions in the TCJA will remain “intact permanently,” or improved, the 199A provision will become permanent and the R&D expense provision “will be restored.”
Nearly 80% of family businesses use a pass-through structure to run their businesses, according to annual research from Family Enterprise USA.
New policies — like no taxes on tips and overtime pay — will also be reviewed, and the so-called wealth tax “will go away regardless,” Steube added.
Other new business tax proposals under consideration by the Trump administration include lowering the corporate tax rate from 21% to 20%, lowering the corporate rate to 15% for domestic manufacturers, a baseline tariff of 10% on all imported goods, a 60% tariff on all Chinese goods, the creation of a sovereign wealth fund from tariff revenue and the reinstatement of 100% bonus depreciation.
Tenney, who also serves on the Ways and Means Committee, believes TCJA “was one of the best things for family businesses.”
The House member said she believes the majority of TCJA provisions will also be made permanent, including the current estate tax rates.
“With a Republican majority in the House and Senate, you will see that happen,” she said. She added that she plans to work with Democrats.
Tenney's key objectives are to “see growth for our family businesses and minimize the harm of some of these regulations.” To that end, she said, “the 199A business deduction and the return of R&D expensing is going to be really important. We don't want to lose our lead in innovation in this country.”
But life and economic policy in Washington, D.C., is never simple. Often, it's a game of Whack-a-Mole: Just as one problematic policy is fixed, another one inevitably pops up. And, of course, cutting taxes often adds up to larger budget deficits and the search for “offsets,” or a rethinking of how the Office of Management and Budget dynamically measures economic growth.
One issue not fully on the radar yet is the relatively new Corporate Transparency Act (CTA), which contains provisions that could be sneakily onerous to family business owners, family offices and other successful individuals.
This little understood new law was enacted in 2024 and affects family businesses of all sizes by requiring business owners to report information about their owners, entities and subsidiary business structures.
The overall goal of the CTA is to help combat money laundering, tax evasion and other financial crimes. But many of these provisions go too far in requiring businesses and individuals to divulge private and personal information.
The reporting requirements and the potential penalties for non-compliance “will surprise a lot of family business owners and family offices,” says Matt Brown, partner at Irvine, Calif.-based law firm Brown & Streza.
“The law was designed to not hurt family businesses, but rather to uncover businesses willfully violating financial rules and safeguards,” says Brown. “There are penalties, both civil and criminal, if businesses do not comply or are found to be misrepresenting their businesses by design. We see some 30 million businesses voluntarily filing their CTA forms this year.”
Brown heads the firm's Tax, Trusts & Estates Group and its Ultra-High-Net-Worth subgroup. He also represents business owners and philanthropists in personal planning, business succession planning and charitable planning.
This new law is still not fully understood by family business leaders or family office advisors, and it's unclear what's needed to comply, what steps are required and what the civil or criminal penalties are if family businesses fail to meet those requirements.
“Now is the time to look at this kind of horrible legislation,” Steube said about the law. “I'm for repealing it, and I encourage everyone to contact their representatives to make the new tax policies permanent and to cut the bad policies. This is a rare time in history to take permanent action on taxes and other policies.”
Early days
Though still early days, our bipartisan Beltway economic policy and tax partners at Squire Patton Boggs and Brownstein also believe a new family business-friendly tax bill will be passed and that the Trump administration will focus heavily on border security, regulatory reform, domestic energy production and an America-centric approach to trade and foreign policy.
This seemingly bodes well for family businesses and family offices and for successful entrepreneurs and individuals creating the businesses of tomorrow, as well as for the NextGens inheriting them.
In fact, millennials are set to inherit as much as $90 trillion in assets before 2044 from their Baby Boomer and Silent Generation family members, according to a recent Royal Bank of Canada report. And they want to keep as much of that wealth as possible, investing much of it back into their family businesses.
Family offices in North America alone manage about $1.72 trillion in assets, according to the report. And they don't want the government poking into their accounts unnecessarily because of the untested Corporate Transparency Act.
How the next four years will end is anybody's guess, but right now America's family businesses are feeling more optimistic about a potentially friendlier business and tax environment.
However, new worries center on what damage proposed heavy tariffs might cause, finding and training workers, leveling the tax playing field for family business pass-through entities, curtailing the growth of the country's massive national debt and, well, the many Rumsfeldian “unknown unknowns.”
Our job is to be vigilant in the face of whatever change may come in 2025 and to make sure family businesses continue to be strong and loud on Capitol Hill. This will not change.