The House of Representatives provided much-needed tax relief for family-owned businesses following seven years of discussion and preparation. The Senate is the next stop in the process, and Majority Leader John Thune is optimistic that he can get a package through the upper house before the July 4th break.
Because many of the 2017 Tax Cuts and Jobs Act’s improvements were only temporary in order to comply with the Senate’s complex budget reconciliation requirements, family companies have been anxiously awaiting clarity on tax policy. Family enterprises are frantically trying to make plans for the future as a result of those enhancements’ scheduled expiration at the end of this year. For many farms, ranches, and small enterprises, this is the situation.
In her testimony before the House Committee on Ways and Means during its 2025 kick-off hearing, Michelle Gallagher, a certified public accountant in Michigan who works closely with numerous family-owned businesses, stated that working families, family businesses, business owners, and their advisors are currently in dire need of clarity and predictability regarding tax laws. Changes to the tax code that occur frequently or at the last minute cause a great deal of uncertainty, which makes it hard for taxpayers to make future plans. Businesses and families are likely to postpone or forego investments such as hiring more staff, raising wages, upgrading business equipment, buying their first home, or setting up a new college savings account for their kids if there is uncertainty. This could impede economic growth and reduce the creation of jobs.
Trump has made it apparent that he wants this completed as quickly as possible. In order to provide consistency and stability, Main Street also wants things completed as quickly as possible and correctly. Avoiding tax increases that would hurt businesses and endanger Senate passage is another aspect of doing tax reform correctly.
Thus far, the House and Senate have prudently refrained from financing their tax relief through detrimental tax increases, such increasing the highest marginal rate that many small businesses pay and C-SALT, which caps state and local deductions for small firms.
Leaders in the House and Senate should concentrate on making the estate tax, the 20% small business deduction, and the equipment expensing provisions permanent for small businesses. By establishing permanent provisions for equipment expensing, the Senate enhanced the House product.
The final measure should take into account small businesses’ top concerns, which are tax predictability and clarity.
Republicans in Congress have a fantastic chance to boost the economy and assist Main Street in thriving. It’s time to concentrate on tax relief while steering clear of contentious initiatives that will impede the expansion of small and family-owned businesses, which are America’s primary sources of jobs.
Palmer Schoening is the head of the Washington-based Family Business Coalition.
