The White House and Republicans in Congress are developing a “Tax Reform 2.0” package to be released before the 2020 elections. The proposal has almost no chance of passing the Democratic House of Representatives but allows Republicans to campaign on the promise of further tax cuts and could serve as a blueprint for future tax legislation should Republicans re-take control of the House.
Discussions are still in their early stages, but the proposal is all but certain to make permanent the individual tax provisions enacted by the Tax Cuts and Jobs Act, which was a central component of the first Tax Reform 2.0 package introduced by House Republicans in 2018. The provisions are currently set to expire at the end of 2025. The Trump administration has also floated the idea of middle-class tax cuts and capital gains tax relief on multiple occasions over the past several months, although no formal proposal has ever materialized.
Other ideas under consideration include at least a partial exemption from the $10,000 cap on the state and local tax deduction for certain small businesses. This would mark a significant shift in policy for Republicans, who have steadfastly rebuffed attempts by Democrats to roll back the cap.
Details are expected to remain fluid as talks advance, but a final proposal could be released in as early as three months.
Washington National Tax Office
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