U.S. House Committee Releases Tax Bill That Leaves Several Questions Unanswered

The U.S. House Ways and Means Committee, which has jurisdiction over tax policy, has released partial text for its portion of the fiscal year 2026 budget reconciliation that Congress currently is writing. As Bloomberg reported, the committee is scheduled to meet to debate and advance the legislation on Tuesday, May 13.

More details are likely to emerge about the bill at that point, but going into the hearing it is clear the draft legislation would:

• Increase the pass-through deduction for qualified business income to 22 percent from 20 percent.
• Raise the estate and gift tax exemption to $15 million and indexes it for inflation.
• Extend current lower rates on foreign profits for multinational companies.
• Extend the current individual income tax rate structure, which means not raising the top individual rate, which many small business owners pay, as President Donald Trump has proposed. (As a reminder, last month the Metals Service Center Institute signed a letter with dozens of other organizations opposing this idea.)
• Not raise the state and local tax deduction, which currently is set at $10,000 for individual taxpayers.
• Increase the child tax credit from $1,000 to $2,500 through 2028 and to $2,000 in subsequent years, and requires Social Security numbers for claiming it.

As noted above, MSCI opposes increasing the top individual income tax rate because that policy would raise taxes on small businesses that are organized as pass-through entities. If you want to tell your representatives in Washington, D.C. to oppose this idea as well, please make your voice heard by using this link to access an action alert from the National Association of Wholesaler-Distributors.