[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]





                  MEMBER DAY HEARING ON MATTERS WITHIN
                    THE COMMITTEE'S TAX JURISDICTION

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED NINETEENTH CONGRESS

                             FIRST SESSION

                               __________


                            JANUARY 22, 2025

                               __________


                          Serial No. 119-FC02

                               __________


         Printed for the use of the Committee on Ways and Means






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                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

59-657                    WASHINGTON : 2025












                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman

VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               DANNY DAVIS, Illinois
JODEY ARRINGTON, Texas               LINDA SANCHEZ, California
RON ESTES, Kansas                    TERRI SEWELL, Alabama
LLOYD SMUCKER, Pennsylvania          SUZAN DelBENE, Washington
KEVIN HERN, Oklahoma                 JUDY CHU, California
CAROL MILLER, West Virginia          GWEN MOORE, Wisconsin
GREG MURPHY, North Carolina          DON BEYER, Virginia
DAVID KUSTOFF, Tennessee             DWIGHT EVANS, Pennsylvania
BRIAN FITZPATRICK, Pennsylvania      BRAD SCHNEIDER, Illinois
GREG STEUBE, Florida                 JIMMY PANETTA, California
CLAUDIA TENNEY, New York             JIMMY GOMEZ, California
MICHELLE FISCHBACH, Minnesota        STEVEN HORSFORD, Nevada
BLAKE MOORE, Utah                    STACEY PLASKET, Virginia
BETH VAN DUYNE, Texas                TOM SUOZZI, New York
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
RUDY YAKYM, Indiana
MAX MILLER, Ohio
AARON BEAN, Florida
NATHANIEL MORAN, Texas

                       Mark Roman, Staff Director
                 Brandon Casey, Minority Chief Counsel









                         C  O  N  T  E  N  T  S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Jason Smith, Missouri, Chairman.............................     1
Hon. Richard Neal, Massachussetts, Ranking Member................     2
Advisory of January 22, 2025 announcing the hearing..............     V

                               WITNESSES

Hon. Jim Baird, Indinia..........................................     3
Hon. Andrew Clyde, Georgia.......................................     8
Hon. Warren Davidson, Ohio.......................................    15
Hon. Emmanuel Cleaver, Missouri..................................    19
Hon. Tom Barrett, Michigan.......................................    25
Hon. Andy Barr, Kentucky.........................................    30
Hon. Brad Finstad, Minnesota.....................................    39
Hon. Rosa DeLauro, Connecticut...................................    44
Hon. Neal Dunn, Florida..........................................    51
Hon. Julia Fedorchak, North Dakota...............................    60
Hon. Vince Fong, California......................................    68
Hon. Marjorie Taylor Greene, Georgia.............................    72
Hon. Laura Gillen, New York......................................    76
Hon. Erin Houchin, Indiana.......................................    83
Hon. John James, Michigan........................................    89
Hon. Keith Self, Texas...........................................    95
Hon. Chuck Edwards, North Carolina...............................    98
Hon. Wesley Hunt, Texas..........................................   102
Hon. Kevin Kiley, California.....................................   109
Hon. Nick LaLota, New York.......................................   112
Hon. Ashley Hinson, Iowa.........................................   118
Hon. Pablo Jose Hernandez, Puerto Rico...........................   122
Hon. Young Kim, California.......................................   131
Hon. Mike Kennedy, Utah..........................................   136
Hon. Rich McCormick, Georgia.....................................   138
Hon. Ryan Mackenzie, Pennsylvania................................   142
Hon. Dan Meuser, Pennsylvania....................................   146
Hon. William Timmons, South Carolina.............................   152
Hon. Marianette Miller-Meeks, Iowa...............................   156
Hon. Celeste Maloy, Utah.........................................   160
Hon. Nellie Pou, New Jersey......................................   163
Hon. Burgess Owens, Utah.........................................   167
Hon. Dina Titus, Nevada..........................................   171
Hon. Derrick Van Orden, Wisconsin................................   176
Hon. Riley Moore, West Virginia..................................   180
Hon. Emilia Sykes, Ohio..........................................   184
Hon. Dale Strong, Alabama........................................   189
Hon. Aumua Amata Coleman Radewagen, American Samoa...............   191
Hon. Jen Kiggans, Virginia.......................................   196
Hon. Glenn Thompson, Pennsylvania................................   200
Hon. Hillary Scholten, Michigan..................................   207
Hon. Jeff Van Drew, New Jersey...................................   216
Hon. Zach Nunn, Iowa.............................................   225
Hon. Stephanie Bice, Oklahoma....................................   230
Hon. James McGovern, Massachussetts..............................   248
Hon. Buddy Carter, Georgia.......................................   252
Hon. Troy Downing, Montana.......................................   259
Hon. Austin Scott, Georgia.......................................   264
Hon. Pete Stauber, Minnesota.....................................   268
Hon. Tony Wied, Wisconsin........................................   272
Hon. Rick Crawford, Arizona......................................   276
Hon. Tim Moore, North Carolina...................................   282
Hon. Andrew Garabarino, New York.................................   288
Hon. Mike Haridopolos, Florida...................................   294
Hon. Mike Lawler, New York.......................................   297

                   MEMBER SUBMISSIONS FOR THE RECORD

.................................................................
Member Submissions...............................................   307

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................   335






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                  MEMBER DAY HEARING ON MATTERS WITHIN
                    THE COMMITTEE'S TAX JURISDICTION

                              ----------                              


                      WEDNESDAY, JANUARY 22, 2025

                          House of Representatives,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:03 a.m., in Room 
1100, Longworth House Office Building, Hon. Jason T. Smith 
[chairman of the committee] presiding.
    Chairman SMITH. The committee will come to order.
    Good morning. I want to welcome everyone to the first Ways 
and Means hearing with President Trump back in the White House. 
The committee has been preparing itself for this moment for two 
years, and we are immediately getting to work to advance the 
agenda of the American people.
    This Member Day hearing is a continuation of a Member-
driven process to get the right policies to the President's 
desk. Last Congress our Member Day had the most participation 
of any committee; 50 percent of the policies discussed at our 
last Member Day hearing went beyond this committee. Policies 
like foster care reforms, border protection, and expanding 
educational choice for parents were all advanced after Member 
Day.
    Today's hearing will have even more Members testify than 
last year. We also invited off-committee Members to participate 
in all 14 hearings we held outside of Washington in the 118th 
Congress, including those on the state of the American economy. 
We are holding our Member Day hearing earlier than last 
Congress, because speed is of the essence to deliver much-
needed relief to working families, and to give small businesses 
the certainty that their taxes will not be going up. To deliver 
on President Trump's economic agenda this committee needs to 
hear from the representatives from every corner of this great 
country.
    During the first Trump Administration, tax cuts ignited the 
largest economic boom of my lifetime, particularly for the 
middle-class families. Taxpayers making less than $100,000 got 
a 16 percent tax cut, while the top 1 percent paid a larger 
share of income taxes. We doubled the Child Tax Credit, and the 
guaranteed deduction. Families in the bottom 10 percent saw 
their incomes rise faster than wealthy families in the top 10 
percent. Unemployment and poverty both fell to the lowest 
levels ever recorded. The economic boom of the first Trump 
presidency, fueled by pro-growth policies, grew Federal 
revenues 1.6 trillion beyond what was even projected. The 
bottom line: workers had more money in their pockets, and 
businesses had more freedom and capital to grow and invest in 
their operation and employees.
    The stakes are high if Congress does not act quickly to 
extend tax relief: capital will remain on the sidelines as 
businesses fear a 43 percent Federal tax rate; good-paying jobs 
will be lost while we risk further weakening our competitive 
edge against communist China; 40 million parents will have 
their Child Tax Credits slashed in half; 2 million family farms 
will see the death tax exemption slashed in half; 91 percent of 
all taxpayers will see their guaranteed deduction slashed in 
half; 26 million small businesses will be hit with a 43.4 
percent top tax rate, more than 20 points higher than what 
businesses pay in communist China.
    People across the country know that we need to act, and act 
fast. Last week, at the first policy hearing across the 119th 
Congress, an accountant testified before this committee that My 
phone is ringing off the hook with calls from farmers and small 
businesses worried about the future of their businesses. These 
folks are the builders behind the economic boom the 2017 tax 
cuts ignited, and they are making decisions today, not months 
from now but today, as to whether to open new facilities, hire 
new employees, and invest in their communities.
    Families and small businesses, they need the certainty 
provided by permanent tax relief. At the same time, there is 
more we can do and must do to further unleash America's 
economic potential. Whether it is greater incentives for 
investments in American manufacturing and jobs here at home, 
greater support for folks looking to start a family or grow a 
family, new tax relief to secure critical supply chains and 
combat China's harmful influence over our economy and national 
security, every single American will be affected by the 
policies that this committee will consider in the days, weeks, 
and months ahead. So it is critical we hear from their 
representatives about their priorities.
    To the people watching at home, know that your 
representatives in Congress are not shy about fighting for you. 
I know, and I speak for members of this committee when I say 
that I look forward to hearing from my colleagues about their 
ideas to deliver timely economic relief to the American people 
this year.
    Chairman SMITH. I will now turn to ranking member Mr. Neal 
for the purposes of an opening statement.
    Mr. NEAL. Thanks, Chairman. I want to thank the members of 
the committee who are participating this morning in this 
important and time-honored tradition called Member Day.
    We perhaps remember things a bit differently on this side 
of the aisle, including $8 trillion of debt that was added 
during the first Trump Administration, military spending that 
now, with the help of some of us, myself included, has gone to 
$850 billion, pandemic relief money, which is now coming to an 
end, but a rebounding economy that the Financial Times and The 
Economist have said is the envy of the world. Sixteen million 
jobs were created during the last four years. Unemployment 4.1 
percent. Not one month during those four years did unemployment 
go up: a staggering achievement.
    So sensible tax policy is what we want to adhere to here, 
but an--understanding it is hard for us to imagine that 
individual Members of Congress can argue for more tax cuts and 
then simultaneously complain about the size of the national 
debt, or at least to include it in the course of the 
conversation.
    So we have some big dates coming up, not the least of which 
is a government shutdown that seems more and more likely could 
occur in mid-March, accompanied by another very important 
consideration: the responsibility of the majority party now to 
raise the national debt ceiling, understanding that when you 
have control of the White House, the Senate, and the House, 
that it is the responsibility of the majority party in those 
instances to raise the debt ceiling. After all, all Members of 
Congress voted in some measure to add to the national debt.
    So, we are pleased that 44 of our colleagues today are 
going to make and offer their recommendations from both sides 
of the aisle as it relates to tax policy to improve the lives 
of the American people. Members come from all parts of America, 
and this is an opportunity to hear diverse viewpoints on a 
range of priorities.
    One of the reminders on an occasion like this that in the 
Ways and Means Committee we get to debate some great issues for 
sure, but we are also obligated to find solutions to the many 
challenges that face the American family. So that is why we are 
all here today. We hope that the people's work will come first 
and indeed strengthen our nation's future.
    Mr. NEAL. And with that I yield back my time.
    Chairman SMITH. Thank you. I would now like to welcome our 
first panel of the day. Thank you for taking the time away from 
your busy schedules to testify before our committee. You each 
will have five minutes to deliver your remarks.
    I now recognize Representative Jim Baird, the gentleman 
from Indiana. Mr. Baird is a veteran of the Vietnam War, where 
he earned a Bronze Star and two Purple Hearts for his service 
to his country. And he continues his service as a dedicated 
advocate for his constituents.
    Mr. Baird.

 STATEMENT OF THE HON. JIM BAIRD, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF INDIANA

    Mr. BAIRD. Good morning, and thank you, Chairman Smith and 
Ranking Member Neal and distinguished members of the House Ways 
and Means Committee. I appreciate the invitation to speak with 
you today.
    The American people are eager for Republicans to right the 
wrongs of the past four years, and I commend you on organizing 
this important hearing so quickly.
    Like many of you, I have spent countless hours traveling 
across my district and listening to constituents in Indiana 
about what issues matter most to them. Way too often Hoosiers 
say their pocketbooks are being stretched thinner and thinner 
every day. On top of this, farmers and industries are facing 
uncertainty regarding the future of the Trump tax cuts that are 
set to expire at the end of the year. I am here today not only 
as your colleague, but as a concerned American.
    Many of you probably don't know this, but before being 
elected to Congress I served on the Indiana General Assembly's 
House Ways and Means Committee, where we had a balanced budget 
biannually. During this time, Indiana successfully repealed the 
inheritance tax with a Republican majority in 2013. It is my 
hope that in this Congress we can work together to achieve 
similar accomplishments.
    The inheritance tax can have devastating impacts on our 
farmers and ranchers. Some have been forced to sell land they 
had in the family for generations just to keep their head 
afloat during the unexpected life event. This is especially 
concerning as family farms, which have been a pillar of the ag 
sector, have been declining in the United States since 2007.
    Right now the average cost per acre in the U.S. is $4,080 
an acre. And in our area in Indiana, some of it has gone as 
high as 19 and $20,000 an acre. The Federal estate tax requires 
individuals who inherit over 13.6 million in assets pay a 40 
percent tax on anything over that cap. That means an individual 
on average who has more than 3,336 acres pays a 40 percent tax 
on any other assets. This does not include equipment, equity, 
retirement funds, which can be much higher in value.
    Further adding to this devastating tax burden, I also want 
to share my concern about the unrealized gains, bonus 
depreciation, investment tax credit, 45Z tax credit, the SALT 
cap elimination or increase, and everyone's favorite topic, the 
corporate tax rate. And like the inheritance tax, taxes on 
unrealized gains cripple family farms and deeply harm rural 
communities by forcing them to sell land and assets. We need to 
be investing in our farmers, not burdening them with additional 
taxes on speculative income.
    Next I would recommend that the committee extend the 
current provisions in President Trump's Tax Cut and Jobs Act 
that prioritizes American businesses and keeps the corporate 
rate at 21 percent. As President Trump has mentioned, 
businesses have been incentivized to move offshore by 
excessively high tax rates in the United States prior to the 
Tax Cut and Jobs Act. Congress needs to let the free market 
take control. A lower tax rate incentivizes more capital 
investment that can result in hiring more workers, raising 
workers' wages, and increasing productivity instead of driving 
jobs overseas.
    Finally, as you already know, two weeks ago the U.S. 
Department of Treasury released a guidance on the 45Z tax 
credit. I believe that, as a Republican majority, we should 
focus our attention to the domestic feedstocks and biofuels, 
and the eligibility should only apply to our domestic 
producers. This will help us deliver our promise to producers, 
and this will help us lower the taxes and lower the costs for 
Americans, and restore our energy and dominance.
    Again, I thank the committee for taking the time to hear my 
comments, and I would be happy to answer any questions that you 
may have. I look forward to working with you and the committee 
and the Trump Administration.
    [The statement of Mr. Baird follows:]

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    Mr. BAIRD. Thank you, and I yield back.
    Chairman SMITH. Thank you, Mr. Baird. We have--I now 
recognize Representative Andrew Clyde, the gentleman from 
Georgia. Mr. Clyde is a veteran of the United States Navy, a 
small business owner, and a dedicated champion for the people 
of Georgia's 9th congressional district. At Ways and Means we 
know Mr. Clyde as the man that beat the IRS.
    So it is good to have you with us, Mr. Clyde.

    STATEMENT OF THE HON. ANDREW CLYDE, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. CLYDE. Well, thank you, Chairman Smith, Ranking Member 
Neal, and members of the Ways and Means Committee, thank you 
for this opportunity. It is an honor to address the first 
committee of the United States Congress.
    The Tax Cuts and Jobs Act, signed into law by President 
Trump in 2017, fueled historic economic growth, raised wages, 
boosted real median household income, and surpassed GDP 
expectations. However, many of its pro-growth policies will 
expire in 2025, risking a significant tax increase for hard-
working American families and small businesses across the 
country. We must deliver on our promises to the American people 
by extending these tax cuts.
    But before I talk about the Tax Cuts and Jobs Act, I would 
like to highlight concerns about the taxation of a fundamental 
constitutional right, the right to keep and bear arms.
    The Bill of Rights was intended to enumerate rights to 
which the government cannot infringe. Unquestionably, 
infringement exists when the government taxes those rights in 
order to limit the people's ability to exercise them. 
Currently, there is an excise tax, or a transfer tax, imposed 
on every firearm under the purview of the National Firearms Act 
of 1934. The only exclusions are purchases by the Department of 
Defense, Federal Reserve, or state and local law enforcement. 
So it is primarily the citizens who are taxed. This tax 
infringes on American Second Amendment liberties by creating a 
massive financial barrier to every purchase, and risks placing 
this constitutional right out of reach of many law-abiding, 
hard-working Americans. It also sets a dangerous precedent for 
using taxation to limit access to other rights.
    In 1819 Chief Justice John Marshall stated, ``The power to 
tax includes the power to destroy,'' and he was totally 
correct. The Heller decision of 2008 declared that the Second 
Amendment protects an individual right to keep and bear arms, 
and that the right existed prior to the formation of the new 
government under the Constitution. Therefore, it was a natural 
right, an unalienable right. And if you can legally tax an 
unalienable right, natural right, even just a little bit, then 
you can legally tax it a lot, and eventually tax it out of 
existence and destroy it for the everyday citizen, just as 
Chief Justice John Marshall stated in 1819. Therefore, I 
strongly advocate for eliminating the Federal excise tax and 
transfer tax on these National Firearms Act firearms.
    I also want to caution Congress about the deficit impacts 
of any reconciliation package. Under President Biden the 
national debt soared to over $36 trillion, more than 100,000 
per person, 250,000 per average household. Every dollar of 
deficit spending is a tax on our country's future. Deficit 
spending equals inflation. I am committed to working with this 
committee and House Republican leadership to deliver on the 
promise of cutting $2.5 trillion in spending, ensuring fiscal 
responsibility in a bill that reduces tax revenues in the short 
term.
    As a small business owner myself, I have seen firsthand the 
positive impacts of the Tax Cuts and Jobs Act Act, what it has 
had in boosting small businesses across the country. One 
provision in particular set to expire is the section 199A 20 
percent pass-through business deduction of qualified business 
income. If this deduction expires, 9 out of 10 small businesses 
could face significant tax hikes, with effective tax rates 
rising up to 43.4 percent. I urge Congress to make the 199A 
pass-through deduction permanent in this year's budget 
reconciliation process to provide certainty, boost small 
business investment, and ensure that Main Street small 
businesses survive.
    Another key pro-growth policy is the 100 percent 
accelerated depreciation for short-lived assets and R&D, also 
known as full expensing, which is set to fully expire by 2026. 
Full expensing allows businesses to immediately deduct capital 
equipment and R&D costs, reducing capital expenses, boosting 
productivity, driving innovation, and attracting investment. 
Like the 199A deduction, I advocate for making full expensing 
permanent to provide businesses the certainty needed for long-
term investment.
    These two pro-growth policies, along with the Tax Cuts and 
Jobs Act provisions, helped drive a strong economy during 
President Trump's first term. I look forward to working with 
the new Trump Administration, this committee, and my colleagues 
to deliver an affordable economy for all Americans.
    Thank you again for the opportunity to testify before you 
today, and I would be happy to answer any questions the 
committee may have.
    [The statement of Mr. Clyde follows:]

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    Mr. CLYDE. And I yield back.
    Chairman SMITH. Thank you, Mr. Clyde.
    I now recognize Representative Warren Davidson, the 
gentleman from Ohio. Mr. Davidson serves on the Financial 
Services and Foreign Affairs Committee and is a dedicated, 
dedicated advocate for the people of the Ohio's 8th district.

  STATEMENT OF THE HON. WARREN DAVIDSON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. DAVIDSON. Thank you, Chairman and to the members of the 
committee for this Member Day, and to Ranking Member Neal. 
Thank you for giving me the opportunity to discuss priorities 
for the upcoming budget reconciliation package.
    And before entering public service I spent 15 years owning 
and operating manufacturing businesses in southwest Ohio. I 
understand firsthand the challenges that businesses face in our 
global economy, challenges that include excessively high taxes, 
excessively complicated regulatory burdens, and a tax policy 
that actually discourages investment in America, particularly 
in manufacturing. Manufacturing is the backbone of our economy, 
and as we work towards restoring America's competitiveness we 
must create a tax framework and a trade policy that empowers 
American businesses to thrive.
    Firstly, I believe that the committee should work to make 
full and immediate expensing permanent, as it was when it 
passed the House in 2017. These expenses should include 
expenses on research and development, investment in technology 
and equipment, and it should incentivize companies to invest 
more, which in the long run not just generates more tax revenue 
and more revenue for our economy, but it raises worker 
productivity, boosts their wages, and creates more jobs.
    To further increase these investments in productivity 
growth, Congress should ensure that 100 percent of the interest 
paid by companies is also fully deductible as a business 
expense. It would lower the cost of access to capital and make 
it easier for businesses to invest in themselves where they can 
deploy their cash flow, growing their businesses rather than 
servicing debt.
    I also support maintaining the carried interest provision. 
This is a controversial treatment, but it has been vital to 
ensure investment from venture capital, private equity, angel 
investors, and also real estate investors. It drives job growth 
and creation and investment in our economy.
    I urge the committee to consider a provision you might not 
be familiar with. It is the People Care Act. This legislation 
would establish a person-centered assistance reform effort so 
that our social service workers could look at a comprehensive 
view of the person, not just administer programs. We have more 
than 90 programs that spend over $1 trillion a year. And if 
nothing else, this bipartisan commission--two Republicans, two 
Democrats, they get time to work together--they could hopefully 
end benefit cliffs, they could have one simple income and asset 
test, and maybe a coherent work requirement that the American 
people support.
    Our current welfare system has good intentions, but over 
time it has created all kinds of things that have been 
ineffective. And hopefully, this very politically polarizing 
approach that we normally do could be kind of, you know, 
disarmed, and create a way for this commission to do their 
work. And at the end we would simply vote yes or no on their 
suggestions. It will generate savings and a better-performing 
social safety net.
    However, I think it is important, as the committee deals 
with the Child Tax Credit, that it shouldn't be part of this 
reconciliation package. It is a bipartisan approach. And using 
the tax system as a means of redistribution hasn't worked well. 
It is part of the challenge that we had as Republicans working 
together to pass the bill last year, and I hope we do that in a 
bipartisan way outside of reconciliation.
    As the committee reevaluates the tax code, it should also 
remove provisions that have had a very harmful effect on 
financial technology. In the infrastructure bill, the Biden 
Administration put cryptocurrency taxes in there that clearly 
don't even understand how the technology works. The 1050I 
provision is particularly troubling, where you have to collect 
all kinds of personally identifiable information, file reports 
for transactions if you operate a node. It is so dysfunctional 
that the Biden Treasury Department had to issue a statement 
saying the plain language of the bill doesn't mean what the 
plain language of the bill says. And so, I hope you guys 
correct it.
    Lastly, but certainly not least, I strongly recommend 
transitioning from the use of taxpayer identification numbers 
to Social Security numbers, particularly for any kind of tax 
credit. So this would work hand in hand with the President's 
policy to eliminate birthright citizenship and rightly apply 
the 14th Amendment. This change will enhance the integrity of 
our tax system and ensure that benefits are received for 
citizens, and address longstanding concerns about unauthorized 
use of taxpayer resources. Social Security numbers should be 
uniquely tied to individual American citizens, and this 
transition will strengthen our tax system's integrity by 
boosting compliance and curbing fraud, in addition to providing 
more revenue for the Treasury.
    In conclusion, these priorities and additions are designed 
to bolster our economy, encourage innovation, ensure fairness 
in our tax system, and I urge the committee to consider these 
points and the many others as you move forward towards 
reconciliation.
    Thank you so much for the opportunity to testify before 
your committee. I appreciate your work, and I look forward to 
the great outcome that you guys are working towards.
    [The statement of Mr. Davidson follows:]

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    Mr. DAVIDSON. I yield back.
    Chairman SMITH. Thank you, Mr. Davidson. I now recognize 
Representative Emmanuel Cleaver, the gentleman from the great 
State of Missouri, former mayor of Kansas City, and the 
congressman for the best football team in the NFL, the Kansas 
City Chiefs. [Laughter.]
    Go ahead, Mr. Cleaver.

STATEMENT OF THE HON. EMMANUEL CLEAVER, II, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE MISSOURI

    Mr. CLEAVER. Thank you, Mr. Chairman and Ranking Member 
Neal. I appreciate the opportunity to testify before you today.
    I am pleased to be testifying before a committee headed by 
my friend and fellow Missourian, Chairman Smith. I have great 
appreciation for him. And for those who don't know, Chairman 
Smith does bleed red and wears red as a commitment to the Super 
Bowl champs twice now. I know that has nothing to do with this 
committee, but you need to know, especially my friend, Dwight 
Evans from where the Eagles no longer fly. [Laughter.]
    I am sorry.
    Whether a rural area of the state or a suburban or urban 
area, our delegations found ways to work toward common interest 
over the years. Americans generally share many of the same 
dreams and desires, regardless of where they are from.
    I also proudly serve as the ranking member of the Financial 
Services, Housing, and Insurance Subcommittee.
    I doubt that anyone will disagree that access to affordable 
housing, that housing that costs a family no more than 30 
percent of household income, is central to a good quality of 
life for an American family. Our committees shared jurisdiction 
in expanding access to affordable housing and helping Americans 
become homeowners. The United States is not building enough 
housing to meet demand, and high housing prices have pushed 
millions of Americans away from home ownership, increased cost 
burdens on households, and limited the ability of employers to 
attract workers, especially in rural areas.
    Before redistricting I served many rural areas in our 
state, and there were and still are communities in the State of 
Missouri--and probably all around the country--where a new 
house is not built in more than two decades. Home ownership is 
important because it is the primary way that Americans 
accumulate wealth and achieve financial stability. We all want 
the next generation to have the ability to achieve the American 
dream by owning a home. And whether a homeowner or a renter, 
the monthly housing payment is the single largest expense for 
most American families.
    Families who cannot afford housing, food, health care, or 
other family necessities are increasingly ending up in 
homelessness. According to HUD, the United States saw an 18.1 
increase in homelessness last year. More than 770,000 people 
were experiencing homelessness on a single given night in the 
United States of America last year. Many are without a place to 
lay their heads for the first time.
    Housing supply is influenced by inflation, zoning rules and 
regulations, labor challenges, material cost, and credit 
availability, among other factors. Importantly, housing is the 
single largest category over a third of the consumer price 
index used to track inflation, and addressing inflation means 
addressing housing. By addressing only one factor will not be 
sufficient. Lowering the cost requires the nation to overcome 
multiple factors across multiple committees to build millions 
of more housing.
    Last year Congress myself, serving as chair of the Housing 
and Insurance Subcommittee, and other members of our committee 
on both sides of the aisle came together to advance the Yes in 
my Backyard Act, this bill that requires localities to examine 
how unnecessary regulations are increasing housing costs. 
Addressing local regulations also has the added benefit of 
saving the Federal Government and taxpayers money. Many of the 
largest sources for assistance for developing affordable 
housing are under this committee's jurisdiction, such as the 
Low-Income Housing Tax Credit, which is the most effective 
affordable rental housing program in history.
    We have many projects in Kansas City, Missouri, such as one 
called Parade Park Homes, which have attracted significant 
private capital and Federal investment and needed limited tax 
credits to move forward. I urge this committee to continue its 
leadership in examining bipartisan legislation such as 
Chairman--former member Ray LaHood's Affordable Housing Act and 
Kelly's Neighborhood Home Investment Act. There are great 
existing ideas on how we can move forward.
    Thank you, Mr. Chairman.
    [The statement of Mr. Cleaver follows:]

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    Chairman SMITH. Thank you, Mr. Cleaver. I now recognize 
representative Tom Barrett, the gentleman from Michigan. Mr. 
Barrett is a veteran of the United States Army, and was a 
member of the Michigan legislature prior to joining us in 
Congress.
    Mr. Barrett.

STATEMENT OF THE HON. TOM BARRETT, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF MICHIGAN

    Mr. BARRETT. Thank you, Mr. Chairman and Ranking Member 
Neal, thank you so much for your attention today and for having 
me before your committee to discuss these important issues that 
you have before you.
    I want to take a moment to address the urgent issue that 
directly impacts the hard-working families and constituents and 
small businesses in Michigan's 7th congressional district, the 
district that sent me here to be their voice. The tax cuts and 
tax reforms that were passed under the 2017 Tax Cuts and Jobs 
Act are essential for us to continue so that our economy can 
grow and prosper. The tax reforms which brought relief to 
millions of Americans are, of course, set to expire at the end 
of this year. If Congress does not act, nearly every household 
and small business in our communities will face a significant 
tax hike.
    Let's put this into perspective. Michigan's 7th district is 
home to nearly half-a-million taxpayers. If these tax cuts 
expire, the typical person will see their taxes increase by 23 
percent. For a family of four earning the median household 
income in my district, that would equate to over $1,600 in 
taxes every single year, or about 10 weeks' worth of groceries, 
a staggering burden, especially given the lost wages due to 
inflation that families have suffered.
    But the impact doesn't stop there. More than 80,000 
families in my district will see their Child Tax Credit cut in 
half, a vital support for parents trying to provide for their 
children. Ninety-two percent of taxpayers will lose half of 
their guaranteed deduction, significantly reducing the amount 
of income shielded from taxation.
    Our small business owners, the backbone of our local 
economies, will face an even greater challenge. For example, 
44,000 small businesses are in my district and will see their 
taxes rise--raised to 43 percent if the small business 
deduction expires. And our farming families who work tirelessly 
to feed us and preserve our agricultural heritage will see the 
death tax exemption slashed in half, making it a tremendous 
financial burden for the more than 4,000 family-owned farms in 
my district to pass their operations on to the next generation.
    These numbers aren't just statistics, they are stories of 
struggle and sacrifice. Every single dollar that our Federal 
Treasury takes in is taken from the productivity of the men and 
women of our districts that sent us here. They these stories 
represent deciding between paying their bills or putting money 
aside for the future. And while the major global corporations 
with their Gucci loafer lobbyists get billions in handouts, 
small business owners are left weighing whether they can afford 
their next month's payroll, and farmers are grappling with the 
uncertainty of passing on their legacy to their children and 
grandchildren.
    Let me be clear. This shouldn't be a partisan issue. The 
tax increase iceberg is right in front of us. But with your 
help, this committee can take swift action to steer the ship in 
the right direction. This is about protecting the livelihoods 
of the people we serve who sent us here. Allowing these reforms 
to expire would roll back years of progress and place an 
entirely preventable burden on our communities.
    But there is more that we can do to lift up families in 
mid-Michigan. I believe it is time we take the Child Tax Credit 
one step further by extending it to expecting mothers and 
families. Families preparing to welcome a baby already face 
financial challenges from medical expenses, maternal care, the 
cost of setting up a home, buying a crib. By extending the 
Child Tax Credit to mothers of unborn children, we can provide 
critical relief at a time when families need it most and affirm 
our commitment to supporting life-affirming and pro-family 
policies.
    As my district's voice here in the people's house, I am 
committed to fighting to not only extend these tax cuts, but 
expand them where it makes sense because I believe fighting to 
ensure families can keep more of what they earn, that small 
businesses maintain competitive--their competitive edge, and 
that the American dream is kept alive for future generations.
    Mr. Chairman, the people of my district sent me here to 
deliver a message: We will not stand for tax hikes that hurt 
our families, our small businesses, our farmers, and our 
families. It is time for Congress to act. I am excited to be 
here with you today, and I am excited to get to work on this.
    [The statement of Mr. Barrett follows:]

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    Mr. BARRETT. Thank you so much, and I yield back.
    Chairman SMITH. Thank you, Mr. Barrett. I now recognize 
Representative Andy Barr, the gentleman from Kentucky. He is a 
dedicated advocate for small businesses and a strong leader in 
the Financial Services Committee.
    Welcome back to Member Day.

 STATEMENT OF THE HON. ANDY BARR, A REPRESENTATIVE IN CONGRESS 
               FROM THE COMMONWEALTH OF KENTUCKY

    Mr. BARR. Thank you, Chairman Smith and Ranking Member 
Neal, and all members of the Ways and Means Committee. I 
appreciate the opportunity to advocate for the Commonwealth of 
Kentucky. And I come from the land of horses and bourbon, and 
so let me start with those two topics and then move to 
opportunity zones and capital gains taxes.
    As you all know, I represent the horse capital of the 
world. We are home, in my district, the 6th district of 
Kentucky, to 400 of the world's greatest horse breeding 
operations. And we need bonus depreciation restored, not only 
for trainers and owners, but breeders, farms, and smaller 
businesses in the equine industry, many of whom would not be 
able to participate if it wasn't for full, 100 percent bonus 
depreciation.
    I urge this committee to incorporate into extension of the 
Tax Cuts and Jobs Act my bill, the Race Horse Cost Recovery 
Act, which would make permanent the modification of accelerated 
depreciation allowance for race horses to allow a three-year 
recovery period for any race horse. This will supercharge the 
sale of our racing stock, our breeding stock, and it matches 
the useful life of a race horse. The default is seven years in 
permanent law. This does not match the useful life for 
investment in race horses. It needs to be three years so that 
they have the option of bonus or the three-year depreciation 
schedule.
    And then finally, the Racehorse Tax Parity Act. Believe it 
or not, the holding period for long-term capital gains for an 
equity is, of course, as you know, 12 months. But not for race 
horses. This asset class is discriminated against in the code. 
You have to hold a race horse for 24 months in order to get the 
long-term capital gains treatment. End the discrimination 
against this asset class. End the discrimination against race 
horses, and adopt the Racehorse Tax Parity Act, which would 
level the playing field with this asset class and make it a 12-
month holding period in order to get capital gain treatment 
instead of that ordinary income treatment.
    Let me talk about bourbon first. So the Duty Drawback 
Clarification Act. This bill would clarify that all whiskey 
products are commercially interchangeable and eligible for the 
drawback program by creating a single eight-digit Harmonized 
Tariff Schedule code for whiskeys. Under the current HTS, 
spirits categories such as whiskeys have several HTS numbers at 
the eight-digit level. For example, Scotch whiskey and bourbon 
each have their own codes at the eight-digit level, meaning 
that these products are not commercially interchangeable for 
purposes of a drawback claim.
    Duty drawback was created as an export incentive, so why 
would we not allow America's signature spirit to compete on a 
level playing field? If tariffs come back, especially the EU's 
snapback tariffs, 50 percent tariffs on our whiskey exports, we 
need the duty drawback to level the playing field for American 
whiskey exports. The EU trade tariffs are something of great 
concern for Kentucky bourbon makers, and we have got to secure 
the permanent return for zero tariffs on spirits with the EU 
before the scheduled re-introduction of the retaliatory tariffs 
on American whiskeys March 31, 2025. I have talked to incoming 
Commerce Secretary Howard Lutnick about this. This is a big 
deal, a multi-billion-dollar industry, and I look forward to 
working with you all on that issue.
    The rum cover-over. The rum cover-over has expired in the 
Virgin Islands and Puerto Rico. Rum distilleries work in tandem 
with many of our U.S.-based spirits companies, including 
distilleries in central Kentucky. The territories and the 
companies rely on the cover-over to meet their fiscal 
obligations. Making the cover-over part of the tax package 
looking back to 2021 and forward would be the responsible 
course of action. Extending the cover-over would be beneficial 
not only to the territories, but also to the Commonwealth of 
Kentucky.
    Real quick on opportunity zones, you know, tax-paying banks 
always want to level the playing field with credit unions. I 
urge this committee to look at especially Chairman Kelly, who 
has been a real leader on opportunity zones enhancement. There 
has been modest progress in helping those distressed areas of 
our country, but we can supercharge opportunity zones by giving 
tax incentives to tax-paying banks to encourage more lending 
and private capital deployment to individuals and small 
businesses in low and moderate-income communities, and my bill 
would do that. I am going to re-introduce that bill which would 
provide those incentives and decrease taxes on banks that 
deploy loans into those opportunity zones.
    Finally, I want to mention the capital gains tax. You know, 
the interesting thing about the capital gains tax right now is 
that the long-term capital gains tax, the 20 percent, is not 
matched with the actual brackets right now. We could extend 
middle-class tax cuts, capital gains tax relief if we tied the 
0 percent rate to the lower three brackets; a 10 percent rate 
to the next three brackets; and only the top rate would get 
that 20 percent rate on capital gains. Right now those income 
thresholds don't match in terms of the tax brackets for income 
versus those triggers for capital gains tax, the 0, the 15, and 
the 20. Only the top tier should pay the 20. The next levels 
should pay the 15.
    But middle-class savers--we have a personal savings crisis 
in this country, they should get a zero capital gains tax for 
the first three brackets. So any one individual making less 
than 100 or a couple making a couple hundred thousand dollars, 
we need to incentivize and make it easier for those middle-
class families to save, super-charging capital formation as 
well. Tie that 15 percent rate, that 0 percent rate to the 
actual brackets. It is tax simplicity, and it is also 
encouraging middle-class savings.
    With that, thanks for your time and I yield back.
    [The statement of Mr. Barr follows:]

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    Chairman SMITH. Thank you. I want to thank all of the 
members for their testimony today. You are all dismissed from 
the panel, and I would love for the clerk to set up the second 
panel.
    Mr. THOMPSON. Mr. Chairman.
    Chairman SMITH. Yes.
    Mr. THOMPSON. While we are doing that, could I be 
recognized to submit an article to the record from the National 
Shooting Sports Federation who are lauding the fact that we 
have this voluntary--I guess it is called voluntary, because it 
came about voluntarily--of excise tax on firearms and 
ammunition, and that all that money goes back into all of our 
districts in regard to habitat enhancement and expansion?
    Chairman SMITH. So ordered.
    [The information follows:]

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    Mr. THOMPSON. Thank you.
    Chairman SMITH. Thank you. I would now like to welcome our 
second panel of the day.
    Thank you all for taking time out of your of your busy 
schedules to testify before the Ways and Means Committee. You 
each will have five minutes to deliver your remarks.
    I now recognize Representative Brad Finstad, the gentleman 
from Minnesota. This is not his first time joining the Ways and 
Means Committee. He attended our trade hearing in Minnesota 
last Congress.
    So welcome back.

    STATEMENT OF THE HON. BRAD FINSTAD, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MINNESOTA

    Mr. FINSTAD. Thank you, Mr. Chairman. And at the risk of 
not offending anybody on this panel, it is nice to see Larry, 
Curly, and Moe sitting in the front row here. [Laughter.]
    But I appreciate your leadership, Mr. Chairman, thank you 
for holding this important Member Day hearing. And thank you, 
Ranking Member Neal.
    It is an honor to be here on behalf of the families and 
farmers and small businesses across 21 counties I represent in 
southern Minnesota. As a proud, fourth-generation corn and 
soybean farmer raising the fifth generation, I know firsthand 
the importance of tax policies that allow farmers to fuel and 
feed the world while ensuring that they have the opportunity to 
pass their operations on down to the next generation.
    I am going to talk about Minnesota biofuels very quickly, 
Mr. Chairman. Minnesota is currently the fifth-largest ethanol 
producer in the United States, with a capacity of over 1.3 
billion gallons annually from 18 ethanol plants. Moreover, the 
size of the U.S. biodiesel industry in Minnesota has doubled 
since 2022, built on major investments. And we have some 
counties that are leading counties in the country in soybean 
production. Minnesota was the first state to require the use of 
biodiesel, and is home to 3 biodiesel plants with a combined 
production capacity of 85.5 million gallons per year.
    As you know, there has been a lot of conversations around 
tax credits ahead of reconciliation. One tax credit I want to 
focus on today is 45Z, or the Clean Fuel Production Tax Credit. 
America First needs American biofuels. American farmers and 
rural communities will be essential to the unleashing of 
America's energy dominance. Homegrown American ethanol and 
biodiesel hold down gas prices, strengthen our domestic energy 
production, bring jobs and prosperity to rural America, and 
deliver cleaner air.
    Minnesota farmers and biofuel producers are optimistic that 
sustainable aviation fuel could be another promising market, 
helping to create a consistent demand and return value and 
revenue streams to rural communities, and 45Z is essential to 
achieving these goals. I ask you to preserve 45Z, but I also 
believe it should be extended to give an adequate foundation 
for lasting, long-term investments.
    Biofuel producers and farmers cannot make sound business 
decisions when confronted with regulatory and fiscal 
uncertainty, both of which have been consistent in 45Z up to 
this point through delays in the final guidance and a limited 
three-year window of eligibility. Now, just last week we saw a 
rule come out of Treasury that lays out the guidance--the 
guidelines of 45Z. This long-overdue guidance is far from 
complete, and it still lacks the critical details that are 
needed to help ensure the American biofuel producers and their 
farm partners can lead the world in clean fuel production.
    That is where we here in Congress, and specifically this 
great committee, can step in and work with President Trump to 
provide farmers with a new pathway to drive the farm economy, 
one that is all encompassing and correctly accounts for the 
many ways biofuel producers and farmers innovate on the farm 
and at the plant according to real science, not political 
science. A strong rural economy depends on strong American 
biofuels industry, and vice versa. This credit can offer a path 
forward for all of our agriculture stakeholders, and I look 
forward to working with you here on this committee and the 
Trump Administration to assure biofuel producers play a central 
role in successful efforts to revitalize rural America.
    As we act to implement our important work in the 119th 
Congress, I look forward to working with the Committee on Ways 
and Means to write and pass strong, conservative tax policies 
that will benefit families, farmers, and small businesses 
across southern Minnesota and all of America.
    And with that, Mr. Chairman, thank you for having me here 
today.
    [The statement of Mr. Finstad follows:]

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    Chairman SMITH. Thank you sir. I now recognize 
Representative Rosa DeLauro, the gentlewoman from Connecticut, 
and the ranking member of the Appropriations Committee.

    STATEMENT OF THE HON. ROSA DeLAURO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CONNECTICUT

    Ms. DeLAURO. Good morning. I want to say thank you to you, 
Chairman Smith, and to Ranking Member Neal for hosting this 
hearing today as we prepare for one of the most important tasks 
ahead of this Congress: negotiating a tax bill that responds to 
the cost of living crisis in this country.
    But first, if I may, I want to pay tribute to a dear 
friend, Bill Harris, who recently passed away and fought for 
decades for the Expanded Child Tax Credit. He recognized and he 
understood its ability to address the economic security of 
middle-class families, working families, and vulnerable 
families.
    Today families live paycheck to paycheck in the United 
States. Their wages have not kept up with costs. The economy is 
not working for them, and it is children who suffer the most, 
whose futures are dimmed by the policies that we choose in the 
present. While families struggle, corporations are richer than 
ever. Their price gouging has driven prices even higher. Dish 
Network, FedEx, Salesforce, T-Mobile, these corporations and 
dozens of others paid no Federal income tax from 2018 to 2020 
under the Trump tax law; 95 companies in the Fortune 500 and 
the S&P 500 paid less than 10 percent tax rate, up from 58 in 
the pre-Tax Cuts and Jobs Act era. Yet the 2024 tax rate for a 
married couple making just over $23,000 is 12 percent.
    How do we address this deeply unjust system? The answer is 
to pass my American Family Act, which would restore the largest 
middle-class tax cut in a generation, and which is the antidote 
to inflation and to child poverty, the expanded monthly Child 
Tax Credit.
    When we passed the Child Tax Credit in the American Rescue 
Plan, it reached nearly 36 million households, 61 million 
children. It gave real money back to millions of working 
families in the form of monthly checks, cut child hunger by a 
fourth, and brought child poverty to the lowest recorded levels 
in history. And the expanded monthly Child Tax Credit returns 
$10 for every dollar spent. How? Because the Child Tax Credit 
helps children learn more, earn more, and grow up healthier. It 
improves educational attainment, lowers health care costs, 
reduces encounters with the justice system, and boosts lifetime 
earnings.
    Making the Expanded Child Tax Credit permanent through my 
legislation, the American Family Act, is how we make a lasting, 
positive impact on all of these issues all at once. Indexing 
the Child Tax Credit is an essential aspect of the bill, which 
will make sure that the value of the credit is not diminished 
over time. I am pleased to see that recent Republican proposals 
agree this is a good idea, in addition to increasing the value 
of the credit beyond $2,000.
    Too many programs lose effectiveness because they do not 
keep up with inflation over time. Indexing the credit creates 
stability and predictability for American families. The 
American Family Act would be one of the largest investments in 
American families and children ever. It would change the game 
and level the playing field for millions of Americans, 
massively reduce poverty, and provide tax relief for middle-
class and working-class families.
    The time to act is now. When we discuss the tax priorities 
for this Congress we must ask ourselves, are we on the side of 
American families and children or that of the wealthiest 
corporations and unchecked billionaires?
    Over the past few months members of this committee will 
hear from corporate lobbyists after corporate lobbyists, 
begging you to make their tax breaks permanent. They will claim 
that unless you do, they will have to lay people off, close 
stores, or move overseas. I will simply urge you to ask them a 
few questions.
    Ask them why, when groceries and other costs like childcare 
skyrocketed, families bore the brunt of inflation and high 
interest rates but corporate profits skyrocketed to a regular--
record $3 trillion in 2023.
    Ask them why, according to the International Monetary Fund 
study of S&P 500 firms, only about one-fifth of their free cash 
from the Trump corporate tax cut was used for capital and R&D 
spending, while the rest was used primarily for stock buybacks 
and dividends.
    And ask them why, with stock buybacks projected to top $1 
trillion this year for the first time ever, we should leave 
more children behind in order to further pad their balance 
sheets.
    This committee has a choice ahead. At the same time as the 
Trump tax giveaway expires, the current Child Tax Credit will 
revert to only $1,000 with partial refundability. Chairman 
Smith, in your district 3 in 10 children were left behind under 
the Tax Cuts and Jobs Act. They do not receive the full credit 
because their parents or grandparents did not earn enough to 
qualify. And it is not that they are not working, they are just 
not earning enough. Yet parents who parents who do not work but 
collect dividends from their stocks are eligible. Your 
requirement is not about work, it is about income, and that is 
wrong. You can make sure that does not happen again. You can 
make sure that all the campaign rhetoric about making this 
economy work for all Americans was not just rhetoric. You can 
do what you promised by passing the American Family Act, the 
proven method to cut taxes in a way that helps the middle 
class.
    Thank you, and I yield back.
    [The statement of Ms. DeLauro follows:]

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    Chairman SMITH. Thank you. I now recognize Representative 
Neal Dunn, the gentleman from Florida. Dr. Dunn is an Army 
veteran and a surgeon, and serves on the House Energy and 
Commerce Committee. He also testified at our Member Day hearing 
last Congress.
    Welcome back.

 STATEMENT OF THE HON. NEAL DUNN, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF FLORIDA

    Mr. DUNN. Thank you very much, Mr. Chairman. It is good to 
be with you. I look forward to supporting my colleagues on this 
committee while you work to renew the Tax Cuts and Jobs Act 
that passed under the first Trump Administration. As someone 
who was in Congress when we passed that TCJA in 2017, please 
consider me an ally to your efforts during this reconciliation 
year.
    In Florida's panhandle, economic growth is driven by 
tourism, agriculture, defense, and a diverse array of small 
businesses. And small businesses in Florida rely on the full 
expensing tax provisions that allow 100 percent write-offs for 
investments made in the year that they are made. These 
provisions, along with other business-friendly incentives, are 
more crucial now than ever as Americans compete with Chinese 
companies to keep manufacturing and R&D in America.
    We should always prioritize American companies' innovation 
over Chinese competitors that are often beholden to the Chinese 
Communist Party. This is also why I have been a long-time 
supporter of reforming the de minimis threshold. I believe that 
lowering the threshold from the current risky level of $800 is 
a no-brainer, and a substantial pay-for that the Ways and Means 
Committee can include for reconciliation. I was fully 
supportive of the Ways and Means Republican trade package that 
passed the committee last spring. In fact, you were gracious 
enough to let me include a bill in that package that prohibits 
China from participating in the general system of preferences 
and tariffs, reauthorization of which is way overdue.
    I also have a bill with my colleague, Representative 
Suozzi, the Import Security and Fairness Act, that eliminates 
China and Russia from receiving de minimis benefits. I believe 
this is important. This is a bipartisan solution to tackle the 
recent explosions in e-commerce packages that the de minimis 
provision allows to enter the United States, currently over two 
million packages per day. I want to emphasize this is a pay-
for.
    Lastly, I want to highlight my tax bill that will catapult 
both our national security and global competitiveness in space. 
I wrote a bill called the Secure U.S. Leadership in Space Act 
that amends the IRS code to treat spaceports the same way we 
treat airports and seaports by allowing the spaceports to 
receive tax-exempt bonds. Airports and seaports are critical 
government investments that advance our economic interests and 
are currently eligible to receive tax-exempt bonds. Spaceports 
are equally important as we rely more and more on satellites, 
telecommunications, security operations, rocket launch 
protocols, and more.
    There are already 10 states that have active spaceports, 
and others are joining the club. We need more national 
investment, including tax incentives, if we want to remain a 
global leader in space. And my bill ensures that all spaceports 
in America are eligible to receive greater investment from the 
public, often used in the construction of airports and other 
infrastructure projects. Investments in space facilities will 
keep us competitive as adversaries such as China pour money 
into their space programs.
    Important work is conducted in this committee in the tax 
space, and I know Ways and Means will fulfill its charge to 
deliver relief and growth to the American people and the 
American economy. I would be remiss if I did not touch on the 
overlap between Ways and Means and the committee on which I 
sit, Energy and Commerce. There is a lot of health reform that 
our committees will work on together in reconciliation. I look 
forward to partnering with my colleagues on this committee on 
an array of issues from transparency, CMS payments, PBM 
reforms, all of which I think are very important pay-fors in 
the reconciliation process.
    And I appreciate the opportunity to testify here today. I 
hope to have Ways and Means' consideration on these incredibly 
important issues as we proceed through reconciliation.
    With that, Mr. Chairman, thank you and I yield back.
    [The statement of Mr. Dunn follows:]

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    Chairman SMITH. Thank you, Dr. Dunn. I now recognize 
Representative Julie Fedorchak, the gentlewoman from North 
Dakota. Prior to coming to Congress, Mrs. Fedorchak spent over 
a decade in public service in North Dakota, and she now serves 
on the powerful Energy and Commerce Committee, getting on there 
as a freshman.

  STATEMENT OF THE HON. JULIE FEDORCHAK, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF NORTH DAKOTA

    Mrs. FEDORCHAK. Thank you, Chair Smith and members of the 
committee. I am honored to be here, and thank you for this 
opportunity.
    I am here. My top goal is to preserve reliable, affordable, 
sustainable energy policy in our country. And I am here today 
to talk about part of the tax code that threatens that and, 
quite honestly, threatens the power grid that all American 
families and businesses rely upon for all daily functions and, 
quite honestly, daily survival. Specifically, I want to discuss 
the Clean Electricity Production Tax Credit.
    This policy has been so effective in its 33 years that it 
is time to rethink and amend it. This policy is triggering a 
massive investment in new wind and solar resources faster than 
can be safely incorporated into our grid, and is having adverse 
impacts on the power grid and energy markets. Enacted in 1992, 
this program sought to boost investment in wind energy by 
offering a tax credit for every kilowatt hour of energy 
produced. At the time the U.S. had less than 1.5 gigawatts of 
installed wind capacity. Today that figure has increased by 
nearly 10,000 percent.
    Under the Inflation Reduction Act the credit was broadened 
to cover all zero-emission electricity generators. The IRA also 
made the Clean Electricity Production Tax Credit transferable, 
meaning utilities can sell their tax credits to financial 
institutions. This transferable credit is a major catalyst for 
renewable energy development, and has created a sizable 
secondary market.
    While the growth of these renewable energy resources is the 
policy of many states, most Americans, especially lawmakers, 
don't realize the threat this rapid expansion is having on the 
reliability and affordability of our electric grid. In your 
packet is a map provided by the North American Electric 
Reliability Corporation. It shows that up to two-thirds of our 
nation is at elevated risk of not having enough power to meet 
demand for electricity today.
    For the last 12 years I was a utility regulator in North 
Dakota, and in this role I was a liaison from my state to the 
power grid MISO, which operates a power grid in central U.S. It 
serves 16 states, and faces increasing grid reliability risks 
from one simple thing: installed capacity is increasing and 
accredited capacity is decreasing. Again, in your chart there 
is a massive gap (sic). In layman's terms, that means that the 
stuff you can turn on and count on is being replaced with the 
stuff that provides power only when the weather cooperates. 
This is an unsustainable gap, and we must correct it.
    We are in danger of building a weather-dependent 
electricity grid. And why is this happening? Because the 
federal government is providing a very generous and expensive 
tax credit to encourage it.
    We have the opportunity to do something about this. The 
Clean Electricity Production Tax Credit and its predecessors 
were intended to be temporary for emerging technologies, and 
has become a misaligned market incentive. Without it, 
renewables would still be competitive. Since 2010 the cost of 
both onshore wind and solar have fallen by 66 percent and 79 
percent respectively, and wind facilities continue to become 
more efficient. The average wind capacity factor grew from 31 
percent in 2004 to 40 percent in 2021. In my state capacity 
factors reached 50 percent or higher. Instead of allowing 
renewables to compete on these merits, our tax policy 
incentivizes investment in renewables at an unsustainable pace, 
inflates Americans' utility bills, adds to our growing debt, 
and jeopardizes reliabilities.
    We all want clean, sustainable energy technologies, but no 
energy solution is sustainable unless it is first affordable 
and reliable. My staff is currently developing a menu of 
legislative options to address these outdated incentive 
structures of this program, and I look forward to working with 
my colleagues on the Ways and Means Committee to pursue reforms 
that preserve the integrity of our grid. Thank you.
    [The statement of Mrs. Fedorchak follows:]

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    Chairman SMITH. Thank you. I now recognize Representative 
Vince Fong, the gentleman from California. Mr. Fong is a former 
aide to the two men who were his predecessors, the former 
chairman of this committee, Chairman Bill Thomas and the former 
Speaker of the House, my friend, Kevin McCarthy.
    It is great to have you here.

STATEMENT OF THE HON. VINCE FONG, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. FONG. Thank you, Mr. Chairman, for hosting this 
opportunity for members to share their thoughts on tax reform.
    As I talk to people in California's Central Valley about 
potential tax hikes, it is clear America needs a tax code that 
enables taxpayers to provide for their families and invest in 
their communities.
    Here is the reality in the 20th district of California: if 
the Trump tax cuts expire, workers, families, farmers, and 
small businesses will pay 21 percent more in taxes. This means 
for a family of four in my district with a median family 
income, they would pay $2,000 more in taxes a year, the 
equivalent of nine weeks' worth of groceries. That is why I 
would like to thank you, Chairman Smith, and all the members of 
the committee for beginning this important work last Congress 
of pro-growth tax incentives to guarantee relief for American 
families, strengthen our small businesses, and reinvest in our 
supply chain and American manufacturing.
    To build upon that work, I would like to highlight some tax 
ideas to consider as we work to extend the Trump tax cuts and 
revitalize opportunities across California and our nation.
    My district is filled with family farmers and small 
business owners. Addressing the death tax would significantly 
relieve a burden for many family farms, where relief from this 
unfair tax would allow future generations to continue their 
farming legacies in rural communities.
    In addition to that, to the important extension of lower 
marginal tax rates, farms across America would continue to 
benefit from increased and immediate expensing, especially in 
the Central Valley, where we produce nearly half of the 
nation's specialty crops, crops which require specialized 
machinery for harvesting, planting, and irrigation.
    Small businesses are the backbone of the American economy, 
employing almost half of the U.S. workforce. This is no 
different in my district. While we must continue to keep 
corporate tax rates low so American companies can compete with 
foreign competitors, small businesses must also be built to 
compete, and the small business pass-through tax deduction will 
allow them to continue to create and invest in our communities.
    The Central Valley, which I am proud to call home, is the 
energy capital of California. We produce 70 percent of the oil 
and gas in California and nearly 60 percent of California's 
renewable energy. But demand will continue to grow, especially 
with the growth of even more data centers, requiring more and 
more energy to fuel AI capabilities and applications. As a 
nation, America must work not only toward energy independence, 
but energy abundance. Allowing geological and geophysical 
expenditures to be recovered is critical to incentivize further 
domestic oil exploration and ultimately allow Americans to see 
lower prices at the pump.
    Finally, we must prioritize tax policy that supports 
American families. The Child Tax Credit supports parents as 
they strive to meet the financial challenges of the day. It 
helps relieve parents of financial stress, whether they are 
saving for emergencies or college education. Being a parent is 
one of the most important jobs there is. That is why it is 
critical to maintain a strong Child Tax Credit to relieve 
financial strain on families as our country recovers from high 
inflation.
    I urge Congress to quickly work to extend the Trump tax 
cuts. There are real-world implications, and hard-working 
Americans are relying on us. It is our duty, as Members of 
Congress, to ensure a strong economy for our fellow Americans. 
Doing so will ensure that Congress delivers on President 
Trump's promise of a vibrant economy for all Americans, 
including the working families, farmers, and small businesses 
in my district.
    I want to thank you, Mr. Chairman, and I yield back.
    [The statement of Mr. Fong follows:]

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    Chairman SMITH. Thank you. I now recognize Representative 
Marjorie Taylor Greene, the gentlewoman from Georgia. Along 
with her service on the Homeland Security Committee, Ms. Greene 
serves as the chairwoman of the new subcommittee on the 
Department of Government Efficiency on the Oversight and 
Government Reform Committee.
    Welcome.

STATEMENT OF THE HON. MARJORIE TAYLOR GREENE, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF GEORGIA

    Ms. GREENE. Thank you, Mr. Chairman.
    President Trump's policies in the Tax Cuts and Jobs Act in 
2017 provided much-needed relief to so many American families 
and businesses, including in my district and also for my own 
business and my own family. Individual income tax rates went 
down. The standard deduction was doubled, the Child Tax Credit 
went up, and the death tax and corporate tax were slashed.
    My district, Georgia-14, is home to over 426,000 taxpayers. 
The average taxpayer in Georgia-14 would see a 25 percent tax 
hike if Trump's tax cuts expire; a family of 4 making $70,423, 
which is the median income in my district, would see a $1,389 
tax increase if the cuts expire--this is worth about 8 weeks of 
groceries to typical families of 4 in the region; 93,160 
Georgia-14 families would see their household's Child Tax 
Credit cut in half--this is not manageable for these families; 
90 percent of taxpayers in my district would see their 
guaranteed deduction slashed in half--they cannot go through 
and handle their monthly expenses if this happens; 31,820 small 
businesses in Georgia-14 would be hit with a 43.4 percent tax 
rate if the small business deduction expires--let me tell you, 
that would ensure certain failure for many of these small 
businesses; 7,267 of my constituents would be impacted by the 
return of the Alternative Minimum Tax; 3,226 family-owned farms 
in my district would have their death tax exemption slashed in 
half in the half--next year--let me tell you, these people will 
lose their family farms; American businesses and individuals 
also deal with burdensome regulations simply to trade 
securities and invest for their families.
    For all these reasons, it is extremely important that we in 
Congress support Chairman Smith and support President Trump's 
plan to extend these crucial policies. We need to deliver a 
historic mandate for the American people, including by 
supporting President Trump's campaign promises of no tax on 
tips, no tax on Social Security, no tax on overtime, and tax 
credits for caregivers.
    Let me re-emphasize that. I traveled the country with 
President Trump for almost four solid years, and I went to many 
of his rallies, probably more than any Member of Congress that 
I serve with. I stood with him in every single state and every 
single city. And when I saw him and heard him campaign saying 
loudly, No tax on tips, no tax on Social Security, and no tax 
on overtime, people rose to their feet and cheered loudly, 
standing ovation after standing ovation.
    We have a mandate from the American people to deliver these 
campaign promises. And I promise you, President Trump, 
especially for Republicans, is more popular than you are in 
your district. So we need to make sure we don't follow any one 
person's idea of what we need to do here with this historic 
mandate. We need to follow what President Trump campaigned on 
and what the people overwhelmingly voted for.
    I thank Chairman Smith and the committee here on Ways and 
Means, and I look forward to working together on these crucial 
pieces of legislation.
    Thank you, Mr. Chairman, I yield back.
    [The statement of Ms. Greene follows:]

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    Chairman SMITH. Thank you, Ms. Greene. I want to thank all 
the members for their testimony.
    You are dismissed from the panel. And will the clerk please 
set for panel three?
    [Pause.]
    I would now like to welcome our third panel of the day.
    Thank you all for taking time away from your busy schedules 
to be here before the committee. You each will have five 
minutes to deliver your remarks.
    I now recognize Representative Laura Gillen, the 
gentlewoman from New York. Prior to joining us in Congress this 
year, Ms. Gillen spent her career in public service to the 
people of Nassau County.

    STATEMENT OF THE HON. LAURA GILLEN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Ms. GILLEN. Thank you, Chairman Smith, Ranking Member Neal, 
members of the House Committee on Ways and Means. Thank you for 
the opportunity to appear before you today to highlight a 
critical priority for my constituents in the 4th congressional 
district of New York.
    As members of the chief tax-writing committee in Congress, 
you will play a major role in the upcoming reauthorization of 
the 2017 tax bill. Without a doubt, the single most urgent and 
important tax priority for my constituents on Long Island is 
the need to eliminate the cap and fully restore the State and 
Local Tax deduction.
    As you know, since the federal income tax was first 
established in 1913, Congress made state and local taxes 
deductible from federal income. They did so out of recognition 
that double taxation of Americans is simply unfair. The SALT 
deduction allowed the hard-working men and women I represent on 
Long Island, who pay some of the highest property taxes in the 
country, to reduce their federally taxable income by deducting 
the full amount that they pay in state income and local 
property taxes. This important bipartisan feature of the tax 
code stood the test of time for more than 100 years.
    As you know, the 2017 tax bill did away with this 
provision, gutting and capping the SALT deduction and, as a 
result, imposing double taxation on my constituents, some 11 
million Americans who hit the cap, according to the Treasury 
Inspector General for Tax Administration.
    By capping and scrapping the full SALT deduction, the 2017 
tax bill has made life even more expensive for my constituents. 
Prior to the cap, nearly 50 percent of all the taxpayers in my 
district used the SALT deduction, with Nassau County residents 
deducting $26,259, on average, more than the double the current 
$10,000 cap. I have heard from countless hard-working families 
in my district over the past few years who have had to pay tens 
of thousands of dollars more in taxes, making their lives more 
expensive and adding to the cost-of-living crisis on Long 
Island.
    For example, a police officer and a teacher in my district 
each making $120,000 paying about $7,000 in income taxes with 
$15,000 in property taxes would have been able to deduct about 
$29,000 in state and local taxes. With the cap they can now 
only deduct $10,000, so they lose about $19,000 that they were 
previously able to deduct.
    I am committed to reversing the harmful SALT cap and 
cutting taxes for my constituents. This is a critical, common-
sense concern in my district that affects hard-working middle-
class families. That is why in my first week in Congress I sent 
a letter to the House and Senate leadership calling for the 
immediate bipartisan negotiations to reinstate the SALT 
deduction, the full SALT deduction.
    I know there is strong support for getting this done in the 
upcoming reconciliation package, among many House Republicans 
and Democrats from New York and from many other states, as well 
as from President Trump. As we all know, he promised in my 
district to get SALT back. That is why I recently sat down with 
my colleagues in the bipartisan SALT Caucus to discuss a path 
forward on reconciliation and our belief in the need to restore 
SALT for all of our constituents.
    Last week I was also proud to join my Republican colleague, 
Representative Andrew Garbarino, and 20 cosponsors on both 
sides of the aisle in introducing H.R. 430, the SALT 
Deductibility Act. I strongly urge the Committee to swiftly 
consider this important bill to restore the full deduction that 
taxpayers had before and they still deserve. I will continue 
working across the aisle on good-faith negotiations to deliver 
tax relief for Long Island.
    Mr. Chairman and Ranking Member, thank you so much for the 
time today, for your work on this committee to help and serve 
the American people. I look forward to working with you and all 
our colleagues to help preserve SALT, lower taxes, and cut 
costs for the families that I am honored to represent. Thank 
you.
    [The statement of Ms. Gillen follows:]

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    Chairman SMITH. Thank you. I now recognize Representative 
Erin Houchin, the gentlewoman from Indiana. Mrs. Houchin is a 
small business owner, which makes her an incredible advocate 
for small businesses and working families in her district. In 
addition to serving on the Financial Services Committee, she is 
our House-elected Conference Secretary in leadership.
    Welcome.

    STATEMENT OF THE HON. ERIN HOUCHIN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF INDIANA

    Mrs. HOUCHIN. Thank you, Chairman Smith and Ranking Member 
Neal. Thank you for the opportunity to speak here today on the 
tax issues that are most important to families and small 
businesses in my district.
    I want to start by discussing one of the most important 
provisions we have in the federal tax code: the Low-Income 
Housing Tax Credit. Since LIHTC was first created as part of 
the Tax Reform Act of 1986, this program has become the most 
important and powerful tool at the federal level for the 
development of affordable housing. From districts like mine in 
southern Indiana to urban centers like Chicago and New York, 
LIHTC has been used to build and maintain low-cost housing for 
Americans across the country.
    As this committee begins the work this Congress to 
incentivize growth and give more families the tools they need 
to achieve the American dream, I hope the committee also takes 
time to consider legislation to expand and improve this 
program, including through proposals like my friend 
Representative LaHood's Affordable Housing Credit Improvement 
Act, which I was proud to cosponsor last Congress.
    Another issue that is of great importance to my 
constituents is the immediate expensing for research and 
development expenditures. Beginning in 2022, companies that 
invest in R&D are no longer able to immediately deduct these 
expenses, marking the first time since 1954 that these expenses 
have been amortized over five years. While this change may seem 
insignificant, the truth is it has made it more difficult for 
American companies to innovate and compete with foreign firms. 
This is why I was proud to cosponsor Representative Estes' 
American Innovation and R&D Competitiveness Act last Congress, 
which would revert this change and again allow continued 
expensing for these expenditures in the years in which they are 
incurred.
    I also want to briefly touch on a topic that I have heard 
about from many stakeholders in my district: energy tax 
credits. Under President Trump Americans are excited to see an 
all-of-the-above approach to energy, embracing new and old 
technologies to address our energy crisis and decrease costs 
for all Americans. As you move forward, I ask you to proceed 
with caution when addressing provisions that have incentivized 
the onshoring of technology and manufacturing, resulting in 
billions of dollars in U.S. investments and thousands of jobs, 
both throughout my district and across the country. Upending 
these incentives could have severe economic consequences if not 
approached thoughtfully. So when considering the future of 
energy tax credits I urge the committee to take a surgical 
approach, with particular interest in the investments that have 
already been made.
    Finally, I want to mention how important it is that we move 
expeditiously toward a single, powerful reconciliation bill. 
One of the greatest accomplishments of the previous Trump 
Administration was the enactment of the Tax Cuts and Jobs Act. 
Under the Trump tax cuts, American families and workers had 
more money in their pockets, businesses were given more tools 
to flourish, and our economy grew at a faster rate than what 
projections thought was possible.
    With President Trump back in office, Americans across the 
country, including in my district, are excited about the 
possibility of a new golden age of growth and prosperity. In 
order to achieve this, however, we need to build upon the 
previous Trump Administration's success and protect working 
families from impending tax hikes.
    Chairman Smith, I know you are aware of how important it is 
that we provide the necessary tax relief to American workers, 
families, and businesses to ensure that our economy stays 
competitive and continues to grow toward its full potential. If 
we don't, we risk falling behind and losing what makes the 
United States the best place to work, to innovate, and succeed. 
That is why it is important that we get to work on one, big, 
beautiful bill that will set America on the right track by 
securing our border, ensuring energy independence, and making 
sure that Americans can keep more of their hard-earned money.
    Thank you again to Chairman Smith and Ranking Member Neal 
for the opportunity to discuss the important priorities for the 
9th district of the State of Indiana.
    [The statement of Mrs. Houchin follows:]

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    Mrs. HOUCHIN. I yield back.
    Chairman SMITH. One, big, beautiful bill. Thank you, Mrs. 
Houchin.
    I now recognize Representative John James, the gentleman 
from Michigan. Mr. James served our nation in the United States 
Army for eight years, and continues his service as a dedicated 
advocate for Michigan's 10th district. This is his second time 
testifying before the Ways and Means Committee.
    Welcome back, my friend.

STATEMENT OF THE HON. JOHN JAMES, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF MICHIGAN

    Mr. JAMES. Thank you, Mr. Chairman. I appreciate your time.
    I will just cut right to the chase. Let's not get it 
twisted. Every single Democrat is going to vote against this 
tax package, and I fear that our Republican colleagues are 
being played for their fools. Giving carte blanche to blue-
state governors to continue to enact laws and regulations that 
will hurt their people and increase with perverse incentives to 
do the right things is not necessarily what we should be doing.
    There are Republicans that are very good friends and 
colleagues--D'Esposito, Molinaro, Garcia, and Steele--who are 
at home right now who made the same SALT argument. And for the 
remaining five of our very dear colleagues who are pushing very 
hard for the SALT cap raising, for the increase in cost of $225 
billion over the next decade, that is $45 billion per seat. How 
much are we willing to pay for a seat? We need to ask ourselves 
this question: Are we willing to pay for certain things at the 
expense of the rest of America? I think that we have a number 
of things that will benefit all Americans, regardless of where 
we live, and that is where I would like to focus today, Mr. 
Chairman.
    It is great to be back here in 119th Congress, and I 
believe that we have to make sure that we ensure that the best 
avenue of prosperity is through education. I particularly want 
to highlight this path of prosperity through the Educational 
Choice for Children Act, legislation intended to expand 
education freedom and opportunity for students.
    And I appreciate our colleague from Nebraska, Mr. Adrian 
Smith, for leading on these efforts, and I look forward to 
working with all my colleagues in these months ahead to get 
this bill for consideration on the House floor. We must 
continue to prioritize reforms to education that expand choice, 
and the best way to do that is to put parents back in the 
driver's seat. I believe firmly that when you give parents 
choice, you give students a chance.
    In addition, I believe the Child Tax Credit, a responsible 
approach to addressing the provisions in the Inflation 
Reduction Act, must also be a part of this important debate on 
how we restore economic prosperity here in America--again, a 
much better use of money for all Americans than just a few on 
the coast. My bill from the 118th Congress, Reignite Hope Act, 
would increase the Child Tax Credit from $4,500 for each child 
from 0 to 5, and $3,500 for each child 6 to 17.
    After four years of reckless Federal spending and terrible 
economic policies out of the Biden-Harris Administration, 
parents in my district and districts all over the country are 
pleading for some relief. They have paid upwards of $6 for gas, 
$10 for a dozen eggs, and $7 for milk. Now more than ever, 
parents across the country deserve relief, proven relief. The 
Child Tax Credit works.
    Lastly, everyone in this room knows there are a multitude 
of concerns about IRA. I share those concerns. The IRA, which 
did exactly the opposite of its name, was a radical attempt to 
institute the left-wing wish list of the Green New Deal agenda. 
EV mandates, which have already cost thousands of good-paying 
jobs in Michigan, removed consumer choice from the free market 
and made us reliant on China, enabled child slave labor in the 
Congo, and widely prevalent EV supply chain risks. I am 
thrilled that the House, along with President Trump, have made 
the elimination of job-killing EV mandates a priority, as I led 
the EVCRA last Congress. We are going to redouble those 
efforts.
    And I would like to echo the comments of my great friend 
and colleague, Representative Houchin, when she mentioned we 
have to go at this with a scalpel and not a chainsaw. I ask 
that we proceed with caution when looking to address the 
provisions of the IRA that have incentivized onshoring the 
future of automotive jobs, manufacturing, and increasing our 
capacity. I do believe that history will show the United States 
government does have a role in increasing capacity, and our 
ability to bring economic prosperity to our people, and to 
defend ourselves through our manufacturing prowess. While the 
bulk of the IRA is damaging policy, we must not neglect the 
sector-wide energy tax provisions that manufacturers and job 
creators rely on in my district and around the country.
    Additionally, it is critical that we continue to 
manufacture and assemble semiconductor chips here in America. 
We cannot rely on our foreign adversaries to produce and 
manufacture our means of self-defense and survival. We can and 
we must repatriate American jobs, reinvigorate the 
manufacturing golden age in this country while mitigating the 
national security risk. If we continue to assemble 
semiconductor chips here in America, we will be in a much 
better position. I encourage this committee to continue to 
consider addressing provisions from past legislation regarding 
our chip supply chain.
    We have to walk and chew gum at the same time, Mr. 
Chairman, and I am confident with your leadership we will. I 
appreciate the time here to speak today, and I want to say a 
particular thank you for working with your staff. We are 
working on a way that we can help, in a conservative manner, 
students with their loan debt while also addressing our 
mandatory spending and the liability we have in the long term.
    And with that, Mr. Chairman, thank you for your time. I 
yield.
    [The statement of Mr. James follows:]

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    Chairman SMITH. Thank you, Mr. James. I now recognize 
Representative Keith Self, the gentleman from Texas. As well, 
he is a 25-year Army veteran who is now serving the people of 
north Texas. Mr. Self is a champion for tax fairness for every 
region of the country.
    Mr. Self.

STATEMENT OF THE HON. KEITH SELF, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF TEXAS

    Mr. SELF. Thank you, Mr. Chairman and members of the 
Committee. I am here today to express my opposition to raising 
the State and Local Tax deduction cap, commonly referred to as 
the SALT cap.
    The implications of this deduction are severe, and it is 
imperative that we consider who in this nation truly bears the 
cost. Raising the SALT cap would unfairly punish residents of 
places like my home state of Texas and other states that have 
no state income tax and are properly governed. Residents in 
these states have made deliberate choices to keep taxes low and 
prioritize fiscal responsibility. Yet under a higher SALT 
deduction their hard-earned dollars would effectively subsidize 
residents of high-tax states that often demonstrate a pattern 
of fiscal irresponsibility.
    Is it fair to ask a hard-working Texan to shoulder the 
financial burden of another state's poor policy choices? Let's 
take a closer look at some of these policy choices. High-tax 
states like New York and California have adopted agendas that 
prioritize wasteful spending over sound governance. They funnel 
billions into programs that promote divisive diversity, equity, 
and inclusion initiatives, burden businesses with costly 
regulations under the guise of a Green New Deal, and allocate 
taxpayer dollars to provide benefits to illegal immigrants. 
These are policies that not only strain their budgets, but also 
fail to address the core needs of their residents such as 
public safety, infrastructure, and education.
    Supporters of raising the SALT cap often argue that it is 
about fairness, claiming that it will ease the tax burden on 
middle-class families in the high-tax states. But let's be 
clear. This is a tax break that overwhelmingly benefits the 
wealthiest households. According to the non-partisan Tax Policy 
Center, nearly 90 percent of the benefits of removing the SALT 
cap would go to households earning $200,000 or more per year. 
Meanwhile, middle-class families in fiscally responsible states 
see no relief, only an increasing Federal tax burden because of 
these subsidized deductions.
    Raising the SALT deduction incentivizes states to continue 
their irresponsible practices, knowing they can shift the 
financial burden to the Federal level and to Texans. This 
undermines accountability and creates a moral hazard, where 
leaders in high-tax states have little incentive to enact 
reforms or control their spending. Our tax policy should reward 
responsibility, not penalize it. It should encourage states to 
live within their means, not enable fiscal recklessness.
    Raising the SALT deduction cap does the opposite. It is a 
giveaway to the wealthy in states that prioritize the woke 
agenda over good governance, and it is paid for by the hard-
working taxpayers in states that do things right. In the words 
of President Reagan, we can lecture our children about 
extravagance until we run out of voice and breath, or we can 
cut their extravagance by simply reducing their allowance. 
Reagan's words resound profoundly today. Eliminating the SALT 
deduction is a critical step toward curbing the fiscal excesses 
of high-tax states while ensuring fairness for taxpayers 
nationwide.
    [The statement of Mr. Self follows:]

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    Mr. SELF. Thank you, Mr. Chairman.
    Chairman SMITH. Thank you, Mr. Self. I now recognize 
representative Chuck Edwards, the gentleman from North 
Carolina. Mr. Edwards serves on the Appropriations and Budget 
Committees, and this is his second time testifying at the 
Member Day.
    So welcome back.

   STATEMENT OF THE HON. CHUCK EDWARDS, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. EDWARDS. Mr. Chairman and fellow committee members, I 
would like to start by thanking you for the chance to speak on 
behalf of the people of my district during this member session 
on four key ideas, and I will be brief on each of those.
    First is wasteful spending. I am sure that we can all agree 
that one of the former administration's most troublesome traits 
was finding new ways to waste taxpayer money. One prime example 
is the direct file program by the Internal Revenue Service. In 
2024 the IRS spent over $24 million launching the Direct File 
Tax Preparation program, which has less than a one percent use 
rate this year. This year the IRS is spending millions more to 
relaunch that program.
    Last week, Representative Adrian Smith and I introduced--
and thank you, Representative Smith--the Fair Preparation Act, 
which would prohibit the IRS from implementing the direct file 
program or any other similar tax preparation program. Simply 
put, the IRS should not be both tax preparer and tax auditor 
for the American people.
    Shifting gears, last year I spoke to this committee about 
an issue plaguing our national unemployment system. Federal law 
requires that Americans on unemployment search for and accept 
work, but it does not require that they interview for a job 
when offered, which is arguably the most important part of a 
job search. We must protect the integrity of our unemployment 
system, and that is why I introduced the Unemployment Integrity 
Act last Congress and I plan to do so again this year.
    The Unemployment Integrity Act makes showing up to an 
interview a mandatory part of the job search, and it 
strengthens audit requirements to protect against further abuse 
of our unemployment system. This is a simple, common-sense way 
to protect against fraud and to return dignity to our 
unemployment system.
    Last year I also spoke to you about difficulties 
communities face getting environmentally contaminated sites 
called brownfields and Superfund sites developed. To address 
this issue and to spark economic development in historically 
untouched areas, I introduced the Economic Opportunity for 
Distressed Communities Act. This act would designate hazardous 
waste sites as opportunity zones, encouraging cleanup, 
development, and revitalization of areas that may otherwise sit 
contaminated for decades to come. This act is a must, and a 
very simple modification to the Tax Cuts and Jobs Act of 2017.
    Finally, last September my district was ravaged by 
Hurricane Helene. Water crested as high as 40 feet in some 
areas of North Carolina's mountains, and recovery continues to 
be a challenge. One solution that I am urging this committee to 
consider is designating disaster-declared areas from Hurricane 
Helene as opportunity zones, as was done in 2005 in the Gulf 
Opportunity Zone Act.
    While the GO Zone Act of 2005 is markedly different than 
the current opportunity zone program that we know today, I 
believe that the western North Carolina mountains who is 
occupied by hard-working folks and were uprooted by Helene and 
deserve the same important investments as communities affected 
by Hurricanes Katrina, Rita, and Wilma in the early 2000s 
(sic).
    I am currently working on legislation in this area, and I 
ask you to work with me to ensure western North Carolina has 
access to every available resource to recover from the 
devastation of Hurricane Helene. Thank you.
    [The statement of Mr. Edwards follows:]

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    Chairman SMITH. Thank you, Mr. Edwards. I now recognize 
Representative Wesley Hunt, the gentleman from Texas. Mr. Hunt 
is a decorated military veteran who serves on the Natural 
Resources and Judiciary Committees.
    Welcome.

STATEMENT OF THE HON. WESLEY HUNT, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF TEXAS

    Mr. HUNT. Thank you, Mr. Chairman, thank you, Ranking 
Member Neal, for the opportunity to speak in support of my 
bill, the POWER Act. This bill will establish a tax credit for 
Americans who have been affected by natural disasters to 
purchase an emergency generator.
    As a native Houstonian, I am too familiar with hurricanes 
and the devastating impact they can have on cities and 
families. I also know the lifesaving impact that generators can 
have during these tragic times. Natural disasters such as 
tornadoes, fires, hurricanes, and blizzards are an unfortunate 
part of life in our country, and each state encounters its own 
unique type of natural disaster. California endures wildfires, 
as we have tragically recently witnessed. Gulf states like mine 
in Texas, including many more, endure hurricanes. And 
northeasterners endure debilitating blizzards as we know, as 
well. As a real-time example in North Carolina, Americans are 
still waiting in long lines in the cold for propane tanks and 
heaters to stay warm after their community was destroyed by 
Hurricane Helene just a few months ago.
    Access to a generator can help all Americans weather the 
storm, no matter which storm they face. Generators help 
families keep the lights on, keep medication and refrigerators 
cold, and keep the house warm when they need it the most. 
Americans need help when their electricity goes out. Americans 
need help purchasing lifesaving emergency generators. That is 
why my bill, the POWER Act, is necessary today.
    The POWER Act will give Americans in disaster-affected 
communities a tax credit of up to $500 to purchase an emergency 
generator that will be valid for only two years after 
enactment. Even better, the POWER Act allows this tax credit to 
be used only for generators made right here in the United 
States. Under the POWER Act Americans will be safer and 
American companies will be stronger.
    One way this tax credit could be paid for is by instituting 
a 50 percent tax credit on remittances from illegal aliens. The 
Texas Public Policy Foundation estimates that a remittance tax 
could generate around $23 billion, triple what the POWER Act 
would cost in total.
    Not only is this issue important to me, my friends and 
neighbors in Texas, and the American people, but it is also 
important to President Trump. President Trump posted on Truth 
Social about this very issue on October 11, 2024. Mr. Chairman, 
I would like to submit a record of President Trump's October 
11, 2024 Truth Social post concerning a tax credit for 
generators.
    Chairman SMITH. So ordered.
    [The information follows:]

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    Mr. HUNT. While I am here, I also can strongly advocate for 
the 45Q tax credit that allows oil and gas companies to invest 
in carbon capture and sequestration; 45Q is one of the biggest 
tax credits the federal government provides that allows energy 
companies to innovate for the future. For example, for a large 
part--the 45Q--the energy industry has reduced American carbon 
footprint immensely. But more importantly, they can utilize the 
captured carbon for what is known as enhanced oil recovery, 
which has resulted in the highest oil recovery efficiency of 
over 100 years.
    To put it another way, 45Q is responsible for one of the 
largest innovative technologies in the world, and that is 
hydraulic fracturing. And thank God we have that today.
    I would like to thank you so much for your time, and thank 
you for your consideration, and thank you for your work on this 
issue, sir. Thank you for having me.
    [The statement of Mr. Hunt follows:]

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    Chairman SMITH. Thank you so much, Mr. Hunt, and I want to 
thank you all for your testimonies.
    You are dismissed from the panel. And will the clerk please 
set up panel number four?
    [Pause.]
    I would now like to welcome our fourth panel of the day. 
Thank you all for taking time away from your busy schedules to 
testify to our committee. You each will have five minutes to 
deliver your remarks.
    I now represent--recognize Representative Kevin Kiley, the 
gentleman from California. Mr. Kiley is an attorney and a 
teacher, and is currently serving in his second term in 
Congress. He is a member of the Judiciary, Education and 
Workforce, and Transportation and Infrastructure Committees.
    Welcome.

STATEMENT OF THE HON. KEVIN KILEY, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. KILEY. Thank you, Mr. Chair. I appreciate the 
opportunity to testify, and I want to take a moment today to 
strongly urge the committee to raise the cap on the State and 
Local Tax deduction that was put in place in 2017.
    In California, my constituents and all Californians pay 
among the highest taxes in the country, and placing this cap on 
the SALT deduction caused them to pay even more. And so this 
year we have an opportunity to provide some much-needed tax 
relief, and I will be strongly advocating for that every step 
of the way as we consider an extension and throughout the 
reconciliation process.
    So as we are all aware, the SALT deduction allows filers to 
deduct up to $10,000 of certain state and local taxes from 
their taxable income. This cap was a major change from 
longstanding federal policy, which respected fiscal federalism 
between the federal government and state and local governments, 
and worked to protect taxpayers from a form of double taxation 
by forcing them to pay taxes on income that went to--not to 
their expenses, but to local governments.
    The average itemized filer in each of the 10 counties in my 
district reported a SALT burden from 12,000 to $28,000 in 2021. 
In a state which already contributes more than any other in 
Federal taxes, this additional burden is difficult to bear. As 
the committee starts work on a new tax package, I am asking you 
to support raising the SALT deduction cap. The Ways and Means 
Committee has an opportunity here to adjust the previous policy 
in a way that will help hard-hit consumers and taxpayers by 
limiting double taxation and demonstrate that this Congress 
hears their concerns.
    A second item that I would like to bring to the committee's 
attention is a bill that I have recently introduced called the 
No Medicaid for Illegal Immigrants Act. This bill prohibits 
states from using both federal and state Medicaid funds to 
provide services for illegal immigrants. I recognize that much 
of this jurisdiction might fall within other committees, but 
there are significant opportunities here to ensure that scarce 
health care dollars are properly focused on Americans and not 
those who have violated the law coming in to this country.
    Border security, of course, is going to be a top priority 
for this Congress, and this is a particularly powerful tool to 
provide an added measure of security at our border and ensuring 
fiscal responsibility.
    To take my state, for example, California has been steadily 
increasing the number of illegal immigrants who can receive 
Medicaid--we call it Medi-Cal--since 2019. In 2024 California 
completed its expansion of Medi-Cal for illegal immigrants, 
allowing individuals between the ages of 26 and 29 to receive 
all benefits afforded to citizens and legal immigrants. 
California's non-partisan Legislative Analyst's Office 
estimates that this will cost Californians $6.5 billion 
annually. That is $6.5 billion annually in taxpayer funds going 
to support free health care for those in our state illegally. 
My legislation will prevent states from spending billions of 
taxpayer dollars on benefits for those who are here illegally, 
while promoting fairness and fiscal responsibility.
    Finally, I want to thank this committee for all its work on 
the Federal Disaster Tax Relief Act last Congress. This 
legislation was vital to my constituents because it allows 
wildfire settlements to be exempted from federal income taxes. 
Many of my constituents have been victims of wildfires in which 
there was a link to a utility. And for them to have to then pay 
taxes on their recoveries was fundamentally unjust and this 
legislation corrected that injustice and goes a long way--
certainly doesn't restore or make them whole, but goes a long 
way towards giving folks the support that they need as they are 
recovering.
    So I thank the committee for considering these very 
important issues for my district, for my constituents, and my 
state.
    [The statement of Mr. Kiley follows:]

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    Chairman SMITH. Thank you, Mr. Kiley. I now recognize 
Representative Nick LaLota, the gentleman from North Carolina. 
Mr. LaLota is a----
    Mr. NEAL. New York.
    Chairman SMITH. New York. Definitely not----
    Mr. NEAL. Mr. Chairman, we anticipate what he is going to 
say. [Laughter.]
    Chairman SMITH. I am looking forward to it. He is a 
champion for the people of New York, and has probably talked to 
me more about tax policy than most members of this conference, 
especially with a provision called SALT.
    It is great to have you here, Mr. Lalota.

STATEMENT OF THE HON. NICK LaLOTA, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF NEW YORK

    Mr. LaLOTA. Thank you, Mr. Chairman. Mr. Chairman, my 
constituents need more SALT, and we in Congress should give it 
to them in this upcoming budget reconciliation.
    The State and Local Tax deduction, commonly called the SALT 
deduction, is the number-one federal tax issue for Long 
Islanders. Discussions of SALT dominate not just the editorial 
pages, but conversations and diners and pizza places and delis 
and bagel stores all around Long Island. And we Long Islanders 
need SALT relief for reasons of Federal fairness and equity.
    First, SALT bars double taxation of income, allowing the 
amount a federal taxpayer pays towards their state income and 
property taxes to be deducted from income taxable by the 
federal government.
    Second SALT's roots in our tax code are as old as the 
federal income tax itself, both established in 1913.
    Third, SALT's foundational principle is based in 
federalism, where states were meant to be a unique and driving 
governing force, and the federal government was meant to have 
limited power and spending.
    Finally, since New York taxpayers receive far less back 
from Washington than we give, SALT helps make us a little more 
even with Uncle Sam.
    Despite these points, some of my Democrat colleagues argue 
that SALT relief is welfare for the wealthy. With due respect, 
that couldn't be further from the truth. My district has the 
highest cost of living in the entire nation, driven by New 
York's staggering tax burden, the highest in the country. What 
might be considered a high income elsewhere barely keeps pace 
with expenses on Long Island.
    And some of my own party argue that SALT relief is an 
improper subsidy for big, bloated state budgets like New 
York's. And I won't deny that Albany's government is oversize, 
wasteful, and mismanaged, but there is an inconvenient truth 
when it comes to federal subsidies: The largest blue states, 
like California and New York, contribute far more to Washington 
than they get in return. California taxpayers send $263 billion 
more to the federal government than it receives, while New York 
taxpayers send $136 billion more to Washington than we receive.
    Said another way, California is ranked 43rd of the 50 
states, getting just $0.65 back for every dollar they send to 
Washington. And New York is ranked 41st of the 50 states, 
receiving just $0.74 back for every dollar. New Jersey, who is 
for SALT, as well, is ranked 48 of 50, getting a mere $0.56 
back for every dollar it sends to Washington. In fact, while 
the poorly run government of New York gets $0.74 back for every 
dollar we send to Washington, efficiently-run state governments 
like Kentucky get $1.89 for every dollar; Arizona, $1.71; and 
South Carolina too gets $1.71 for every dollar it sends to 
Washington.
    I am not here to defend the tax-and-spend policies of my 
state, for those ill-fated policies that are the primary reason 
that New Yorkers are leaving for places like Florida and the 
Carolinas. But I am here to say that the assertion that my 
state's big, bloated government gets more than its fair share 
from Washington is not grounded in fact. To the contrary, hard-
working Long Islanders and millions of others in high-tax 
states are already subsidizing the rest of the country. SALT 
relief simply ensures they aren't taxed twice on the same 
income. A higher cap on SALT, my colleagues from the Ways and 
Means Committee, will bring fairness and equity to this 
disparity.
    Thank you, Chairman, for your time and I yield back.
    [The statement of Mr. LaLota follows:]

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    Chairman SMITH. Thank you, sir. I now recognize 
Representative Ashley Hinson, the gentlewoman from Iowa. She 
joined us back in August for our hearing at the Iowa State 
Fair.
    So we heard from you the priorities of Iowans in the Trump 
tax cuts. It is great to have you back with us.

   STATEMENT OF THE HON. ASHLEY HINSON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF IOWA

    Mrs. HINSON. Thank you, Mr. Chairman, and thank you, 
Ranking Member Neal and my colleagues on this committee, for 
having this very important Member Day hearing to hear about the 
most important tax issues facing Iowa families and American 
families.
    We are really approaching a critical inflection point in 
our tax policy this year, as we all know. The 2017 Tax Cuts and 
Jobs Act provided tremendous opportunities for Iowa businesses 
to grow and expand and for working families to truly thrive. In 
sectors like manufacturing the Tax Cuts and Jobs Act spurred 
five million new jobs, one of the many resulting 
accomplishments of this legislation. And Members of Congress 
and this committee have the chance now to build on the success 
of these tax cuts to continue to foster economic growth, 
especially in rural communities like those that I am proud to 
represent in Iowa.
    As our foreign adversaries like China continue to invest in 
research and work to gain control of critical supply chains, it 
has never been more important for Congress to commit to pro-
growth tax policy that secures American leadership on the 
global stage. To do so, reaffirming our support for American 
small businesses will be a vital step to ensure the United 
States remains the best place to do business globally.
    Small businesses are the foundation of Iowa's economy, 
making up over 99 percent of Iowa businesses and employing over 
half of our state's workforce. Permanently extending key 
provisions of the TCJA, including section 199A deduction, will 
help small businesses continue to invest in their operations 
and employees.
    Additionally, Congress can continue to support research and 
development by domestic manufacturers by extending key policies 
like immediate expensing for research and development.
    Congress should also maintain and expand policies that 
allow Americans to pass their operations on to the next 
generation. Preserving essential tax tools like stepped-up 
basis will ensure that Iowa farmers can keep those farms in the 
family.
    I am also supportive of efforts led by my fellow Iowan, 
Congressman Randy Feenstra, to permanently eliminate the death 
tax, which would help Iowans pass on those family farms and 
small businesses without extreme tax burdens from the federal 
government.
    As a mom to two boys, I know the importance of providing 
tax relief to working families. The Trump tax cuts 
significantly expanded the Child Tax Credit, providing 
necessary support to millions of American families. Building on 
those improvements, I introduced the Providing for Life Act to 
continue prioritizing the needs of families and ensure that 
they have the have the resources to thrive. This comprehensive 
package supports families at every stage of life, including 
provisions for paid family leave, support for expectant parents 
and pregnancy centers, and an Expanded Child Tax Credit with 
increased refundability and extended eligibility.
    So these improvements, combined with continued commitment 
to support access to child care through the Child and Dependent 
Care Tax Credit, will help to reduce financial pressure on 
rural working families who often face really unique challenges 
such as limited job opportunities, longer commutes, and higher 
costs for many essential services.
    And finally, I encourage the committee to double down on 
policies that help to support American energy dominance. Tax 
provisions that incentivize new investment in the production of 
liquid transportation fuels like biofuels, many made right in 
Iowa, will be a critical component of an energy strategy that 
bolsters our energy independence and lowers costs for 
consumers. This is especially important for my state. The 
biofuels industry contributes over $7 billion to our economy 
annually, and supports nearly 57,000 jobs across Iowa.
    I appreciate the committee's attention to potential 
improvements for tax incentives, like the 45Z Clean Fuel 
Production Credit and the 40B Sustainable Aviation Fuel Credit. 
Ensuring that these are preserved and effectively implemented 
will support new opportunities for home-grown liquid 
transportation fuels, and continue to bring millions of dollars 
in private-sector investments to states like Iowa. As we like 
to say, it is an all-of-the-above and all-of-the-below 
strategy. Congress should ensure these credits are driven by 
the needs of producers, providing farmers with the flexibility 
that rewards them for their good practices while providing 
long-term certainty to make those new investments.
    So again, I would like to thank the chairman, members of 
the committee for being here today and listening to us, for the 
opportunity to testify before you. By allowing Americans to 
keep more of their hard-earned money, keep it in their pockets, 
we are going to continue to support American competitiveness on 
the global stage and enact policies that will facilitate 
American energy dominance. We will continue to promote that 
economic growth and prosperity across the country.
    Thank you, Mr. Chairman, I yield back.
    [The statement of Mrs. Hinson follows:]

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    Chairman SMITH. Thank you, Mrs. Hinson. I now recognize the 
Resident Commissioner, Pablo Jose Hernandez, the gentleman from 
Puerto Rico. Mr. Hernandez is a graduate of Harvard University 
and Stanford Law School, and just recently joined us this 
Congress.
    So welcome.

    STATEMENT OF THE HON. PABLO JOSE HERNANDEZ, A RESIDENT 
   COMMISSIONER IN CONGRESS FROM THE TERRITORY OF PUERTO RICO

    Mr. HERNANDEZ. Thank you, Chairman. Chairman Smith, Ranking 
Member Neal, and distinguished members of the Ways and Means 
Committee, thank you for the opportunity to testify before you 
today and share the issues that are critical to Puerto Rico's 
success.
    As Puerto Rico's resident commissioner, I have three 
priorities: one, economic development, particularly through tax 
incentives that take advantage of Puerto Rico's unique status; 
two, equal treatment in federal programs; and three, the 
island's energy grids reconstruction. Since this is the Ways 
and Means Committee, I will focus on priority number one, tax 
incentives. My written statement will address the other two 
points.
    Puerto Rico presents a valuable opportunity to help 
strengthen our supply chain resilience, reduce our reliance on 
China, and counter Chinese influence in the Americas. Our 
island combines a skilled workforce, a strategic location, and 
a special tax status, as Puerto Rico is generally exempt from 
federal income tax laws. This, along with being part of the 
U.S., has made us an attractive hub for manufacturing, 
particularly pharmaceuticals and an emerging air and space 
industry. For example, Puerto Rico leads the U.S. in 
pharmaceutical manufacturing and exports, contributing 19 
percent of the $66 billion in pharmaceuticals exported in 2020. 
Additionally, in 2022 Puerto Rico's aerospace industry 
generated $625 million in annual revenue.
    But Puerto Rico needs additional incentives to offset the 
cost of doing business in an island. We had incentives like 
that in the past, and they worked for the U.S., for Puerto 
Rico, and for the cause of freedom and democracy in the 
Caribbean region during the height of the Cold War. The phase-
out of section 936, as that incentive was known, triggered an 
economic recession and Puerto Rico's eventual bankruptcy. Since 
then, Puerto Rico has barely seen any positive economic 
indicators. We need to do better. I urge this committee to 
explore modern tax incentives tailored to Puerto Rico's 
potential and America's challenges.
    One promising bipartisan initiative is the Supply Chain 
Growth and Recovery Act, introduced by Congresswoman 
Malliotakis of this committee, which incentivizes investments 
in Puerto Rico to re-shore critical supply chains to the United 
States. This legislation not only supports our local economy 
and boosts domestic production, but also strengthens U.S. 
supply chain resilience and reduces reliance on foreign 
adversaries like China.
    Another promising initiative is the Territorial Economic 
Recovery Act, introduced by Congresswoman Stacey Plaskett of 
this committee, which would restore favorable tax treatment for 
investments in U.S. territories and commonwealths, including 
the Virgin Islands and Puerto Rico. I rarely agree with him, 
but as White House trade councilor Pete Navarro said, ``This is 
our chance to say China is fired, Puerto Rico is hired.''
    Mr. Chairman, I ask for unanimous consent to enter my full 
written testimony for the record.
    Chairman SMITH. Without objection.
    [The statement of Mr. Hernandez follows:]

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    Mr. HERNANDEZ. Thank you.
    Chairman SMITH. Thank you sir. I now recognize 
Representative Young Kim, the gentlewoman from California, Mrs. 
Kim made history when she became the first Korean-American 
woman to ever serve in the United States Congress. She serves 
on the Financial Services and Foreign Affairs Committee.
    Welcome.

 STATEMENT OF THE HON. YOUNG KIM, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mrs. KIM. Thank you, Chairman Smith and Ranking Member 
Neal, members of this committee. Thank you for having this 
Member Day hearing to learn about our priorities for our 
respective districts.
    I represent the hard-working people of California's 40th 
district. My constituents primarily reside in the counties of 
Orange and San Bernardino, and a small portion of Corona in the 
San Bernardino Riverside County. For most of my constituents, 
as I am sure many of your constituents, increasing living costs 
and home affordability are top of mind.
    As the Ways and Means Committee begins the process of 
writing a tax package, I ask that your members consider fixing 
the State and Local Tax, SALT, deduction cap that is imposed by 
the Tax Cuts and Jobs Act.
    The TCJA SALT cap also discriminated against families who 
filed their taxes jointly because it imposed the same 10,000 
cap as individual filers. The committee must also consider 
fixing this marriage penalty.
    The SALT deduction originated from the Revenue Act of 1913, 
which included a provision that allowed the deduction of state 
and local taxes in order to prevent double taxation. For over a 
century, the SALT deduction was a bedrock of tax law and 
allowed more families to keep more of their hard-earned money 
in their pockets. Unfortunately, the SALT cap made home 
ownership unattainable for districts like mine. According to 
the Federal Housing Finance Agency's National House Price 
Index, a metric of how selling prices for single family homes 
have changed, we saw an increase of 60 percent from July 2019 
to July 2020. All the while, the SALT cap remains the same.
    Fixing the SALT cap is not a red or blue state issue. It is 
all about making homes affordable for my constituents, no 
matter who they voted for.
    I also would like to encourage the Committee to consider 
Representative LaHood's Affordable Housing Credit Improvement 
Act, which I have strongly supported as an original cosponsor. 
The bill would finance more affordable housing by expanding and 
strengthening the Low-Income Housing Tax Credit.
    Additionally, I urge the Committee to follow the Speaker's 
thinking on the Energy Tax Credit enacted by the Inflation 
Reduction Act, and use a scalpel, not a sledgehammer, when 
thinking about which tax credits to repeal.
    So Chairman Smith, members of the committee, I look forward 
to continuing to work with you and your team to address many of 
my constituents' concerns. So thank you again for listening and 
for the opportunity to speak with you today.
    [The statement of Mrs. Kim follows:]

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    Mrs. KIM. I yield back.
    Chairman SMITH. Thank you, Mrs. Kim. I now recognize 
Representative Mike Kennedy, the gentleman from Utah. Mr. 
Kennedy is a family physician, attorney, small business owner, 
and comes to Congress following his service in the Utah State 
Legislature.
    Welcome.

    STATEMENT OF THE HON. MIKE KENNEDY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. KENNEDY. Chairman Smith, thank you very much, and 
Ranking Member Neal. I am honored to be here. Frankly, I will 
just say I didn't know freshmen were even allowed in this room, 
let alone to be able to testify to this august body.
    Thank you very much for allowing me to be here, and also 
for leading the charge to craft what President Trump has called 
one, big, beautiful bill, which I want to call B3 as a result 
of the way he alliterates that. Your vision and leadership will 
be crucial as we work to extend tax relief for workers, 
families, and businesses while reigniting our nation's economic 
engine.
    President Trump's Tax Cuts and Jobs Act was a monumental 
step forward for our economy. It lowered taxes for hard-working 
Americans, created a surge in business investment, and 
increased opportunities for families across the country, 
including my own. Many of the key provisions of this historic 
law are set to expire, and we cannot allow the progress we have 
made to unravel. It is imperative that we extend these tax cuts 
as soon as possible to provide the stability and certainty that 
American families and businesses need to plan, grow, and 
thrive. Acting now ensures that we avoid unnecessary economic 
disruptions and solidify the foundation for sustained 
prosperity.
    At the same time, we must honor President Trump's vision by 
ensuring this effort remains truly beautiful. That means 
cutting away any unnecessary complexity or provision that does 
not directly serve American taxpayers. A clean, focused and 
effective approach will deliver the maximum benefit to the 
American people and ensure this relief is felt where it is 
needed most.
    Equally important is addressing the growing challenge of 
mandatory spending. Without reform, programs such as Medicaid 
will continue to drain our fiscal resources, limiting our 
ability to invest in key priorities. These programs are riddled 
with unchecked and unnecessary spending that diminishes their 
effectiveness and severely jeopardizes their financial 
sustainability. B3 will provide a critical opportunity to cut 
wasteful spending and improve program efficiency. And I will 
just say to the body I am invested in Medicaid reform. And any 
ideas that I can bring to the table, I would be honored to 
share those with you.
    Mr. Chairman, President Trump is counting on us to deliver 
results, and so are the American people. Let's make his one, 
big, beautiful bill a reality by extending his tax cuts, 
refining the system, eliminating wasteful spending, and 
doubling down on economic policies that work for our country. 
Thank you for your leadership, and I look forward to working 
with you in this committee to achieve these critical results.
    [The statement of Mr. Kennedy follows:]

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    Mr. KENNEDY. And I yield back. Thank you, Mr. Chairman.
    Chairman SMITH. Thank you for your testimony. You are 
dismissed from the panel. The clerk will set up panel five.
    [Pause.]
    I would now like to welcome our fifth panel of the day, and 
thank everyone for their time for their busy schedule right now 
(sic). You all have five minutes to deliver your remarks.
    I now recognize representative Rich McCormick, the 
gentleman from Georgia. Dr. McCormick is a decorated veteran 
and an emergency room physician, and brings his expertise to 
the House Armed Services Committee, Science, Space, and 
Technology Committees.
    Welcome.

   STATEMENT OF THE HON. RICH McCORMICK, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. McCORMICK. Thank you, Mr. Chair, and thank you for 
hosting, and all my esteemed colleagues on this committee that 
is so important to our future in America. I am really excited 
about the opportunities we have to trim some of the fat that we 
have, and actually address some issues that are going to lock 
in our prosperity for the next several years.
    Our nation's tax code is a massive tool to drive the 
economic engine or to hinder it. With the impending Tax Cuts 
and Jobs Act tax provisions that we must sustain, it is not a 
tax cut, it is a sustainment of something that keeps us 
competitive in the world market, something that without which 
we will have higher tax corporate rates than those of China and 
Russia. We will have headquarters moving overseas. So it is 
imperative to lock these in as soon as possible, and I don't 
think we will have any dispute there.
    Most importantly, the American innovation needs to be 
unshackled to the tax code. When you look at the policies for 
R&D, to lock in the ability to write off those without 
extending them over a period of five years, which really 
hampers small businesses that don't have that sort of leverage, 
we need to lock that in as well. I support extending the 45X 
Advancing Manufacturing Production Tax Credit, all these things 
which aren't very controversial. The tax incentives, not 
government handouts, should also be our motto.
    Now, one thing I want to talk about that will be the 
controversy and the thing that holds us up. We have some things 
that we need to get to and we need to get to quick if we are 
going to solve this before the last minute. A lot of times we 
pin ourselves on the back marker. In other words, if we wait 
until last minute to vote on these things and we don't have 
consensus, we will hamper our big, beautiful bill from being 
passed.
    Now, I have my own concerns, whether it be about 
specifically giving people tax deferment or even tax credits 
because they have a special sort of service--in other words, 
people who get tips. I get it, it is something great, and I 
know they work hard, but so do police officers, firefighters, 
military people, childcare providers, teachers. A lot of great 
people work for money that make less than those people who 
receive tips. I think we have to be really even-handed when we 
apply the Constitution to our Americans. That is our promise, 
to sustain and defend the Constitution of the United States.
    Furthermore, our SALT provisions. I know we are probably 
going to have to come to some sort of compromise, but we better 
come to it quick, and we better have some specifics quickly, 
because if we don't we will be mired down and we will put our 
backs against the walls and we will end up with another CR, and 
it won't be what the American people want. We have a very short 
opportunity, a window of about 100 days, to get done what we 
have to get done with compromise. But we want to hear 
specifics. We, as Congress members--and you guys are in 
control, you guys get to drive this boat--but we want to hear 
what the specifics are on the SALT provisions so we can start 
that debate on what specifically we need to come to the table 
with.
    What--I don't want to have SALT at all, but we probably 
will, so let's talk specifics. I am willing to compromise on 
some issues, maybe some things I don't want. All of us are 
going to have to do that in order to get this across the line. 
But let's get down to the specifics sooner, rather than later. 
I think that is the main point, because we all want to sustain 
Trump's promises, deliver to the people the tax cuts that we 
promised, deliver an economy that is robust and brings us into 
the future, and cut down on the deficit spending so that we 
don't bankrupt our system.
    If we don't address Medicare and Social Security in this 
Congress, the next two years, we will have automatic cuts of 21 
percent on Social Security and 11 percent on Medicare. It is 
not going to be addressed by somebody else. It has to be us. 
This is our one opportunity.
    I leave it to you, Jason Smith, our illustrious chair, and 
this illustrious body, my peers and those people who have the 
finer details than I do to get this done. I am ready to work 
with you.
    [The statement of Mr. McCormick follows:]

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    Mr. McCORMICK. And with that I yield.
    Chairman SMITH. Thank you, sir. I now recognize 
Representative Ryan Mackenzie, the gentleman from Pennsylvania. 
Mr. Mackenzie is one of our newest members, and comes to us 
from the Pennsylvania House of Representatives.
    Welcome.

   STATEMENT OF THE HON. RYAN MACKENZIE, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. MACKENZIE. Thank you, Mr. Chairman, for that 
introduction and for allowing me the opportunity to speak with 
the committee today.
    In 2017 Congress and the President secured the passage of 
the Tax Cuts and Jobs Act, a piece of legislation that helped 
in many ways restore our competitiveness, grow our economy, and 
raise wages for working people. I am here today to talk about 
what we can do to build on that and actually improve the 
standing for working families with new and expanded tax 
credits.
    Specifically, I am proposing expanding four areas of relief 
that we can provide to working families: the first is expanding 
paid family and medical leave benefits for businesses that 
offer that to their employees; the second is expanding and 
actually creating a child care tax credit; third is an 
expansion of a tax credit for children; and the fourth is the 
expansion of an adoption tax credit, with an additional 
inclusion of a tax credit for IVF.
    Today, as we consider these extensions and the many 
components of the Tax Cuts and Jobs Act which could help build 
on the foundation of a new era of prosperity in our country, we 
need to focus on working families. In the greater Lehigh Valley 
and across the country, we want to see more than just an 
extension or an expansion of the law. We need to see that these 
working families receive immediate relief from inflation and 
high prices that have plagued them for the last number of 
years.
    As the committee is well aware, for four years the American 
people have faced difficult economic challenges. Prices have 
skyrocketed. Wages have stagnated. And home ownership is 
increasingly out of reach. This has created hardship for people 
across socio-economic and demographic spectrums, but it has 
especially impacted working families who already face high 
costs relating to raising children.
    As we begin the work of revitalizing the American economy, 
I hope that we can work to deliver immediate relief to those 
families. That starts with untangling the increasingly complex 
financial knot of parenthood, starting at the beginning.
    For parents the stress and financial difficulty of raising 
children starts early. According to the Department of Labor, 
only 27 percent of civilian workers have access to paid family 
leave. That means the majority of workers, especially 
prospective mothers, face major strains and tough choices in 
the early and first couple months of parenthood. Many parents 
cannot afford to take time off of work in order to be with 
their newborns. Some families may be able to rely on friends 
and relatives, but many don't have that luxury. That is why I 
am proposing that the employer tax credit for paid family and 
medical leave be doubled and be made permanent. This credit, 
created by the Tax Cuts and Jobs Act for 2018-2019 and then 
extended through this year, has had a meaningful difference for 
millions of parents. Now we have the opportunity to go even 
further and make paid family leave a reality for even more 
Americans.
    We also know that the challenges facing working families go 
far beyond the first weeks of a newborn's life. Childcare costs 
have become an extraordinarily challenging topic for millions 
of parents. In the greater Lehigh Valley, the area that I 
represent, the Department of Labor has said that the median 
cost of child care exceeds $11,000 per year in 2024, which is 
about 11 percent of the median family income. Factor in the 
surge in prices of things such as food and energy, housing, and 
health care, and it is clear that working families are facing 
an extraordinary challenge in paying for child care.
    This also means that working parents face tough questions 
on whether or not to join the labor force. For many, the take-
home pay after accounting for the cost of child care is 
negligible, leading many to stay at home who may otherwise be 
interested in working. At a time when many employers say that 
they need workers, we don't want parents wrestling with the 
question of whether it makes more financial sense to work or 
stay at home.
    We can help solve this problem. We can support working 
families and revitalize the labor force by creating a child 
care tax credit. Such a credit provided to working parents of 
young children would help offset the enormous cost of child 
care and reduce the growing financial burden on families at a 
time when they need help. And again, I will say that the child 
tax credit, which has received a lot a lot of attention, could 
certainly use the expanding.
    And the final point is that for many families who are not 
able to have children of their own, adoption is a great 
resource and opportunity for them. Expanding that tax credit 
and adding an additional tax credit for IVF would help those 
families that are looking to grow their family have the ability 
and the financial opportunity to do so.
    I would like to thank the committee and the chairman for 
this opportunity to present these four ideas for you, and I 
appreciate your consideration. Thank you again.
    [The statement of Mr. Mackenzie follows:]

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    Chairman SMITH. Thank you, sir. I now recognize 
Representative Dan Meuser, the gentleman from Pennsylvania. Mr. 
Meuser is a small businessman and serves on the Financial 
Services Committee. He also testified at our Member Day hearing 
last Congress.
    So welcome back.

STATEMENT OF THE HON. DAN MEUSER, A REPRESENTATIVE IN CONGRESS 
             FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. MEUSER. Well, thank you very much, Mr. Chairman, and to 
all members of Ways and Means. I appreciate it very, very much. 
Certainly, the work here is going to be done very carefully as 
our focus needs to be on tax investments that create growth 
while we are at the same time trying to reduce our incredibly 
excessive deficit. So that is very much appreciated.
    And I also appreciate the fact that the only red line I 
have is that there are no red lines. But what I have to offer 
here, I think, fits within what I--as I express, return on 
investment tax reductions because the whole idea, of course, is 
to create more taxpayers while we have less taxes, which is the 
result of less taxes.
    So this Congress, Mr. Chairman, this committee in 
particular, has a chance to deliver significant relief to the 
American people by, of course, extending the TCGA (sic), 
especially for small business tax credits.
    I do urge the committee to consider something, Chairman, 
and you and I have talked about it before. My bill, known as 
the USA Batteries Act, which has deductions for--or excuse me, 
as well as deductions for intangible drilling costs and needed 
health care provisions that will bring stability and ensure 
access to care, particularly in rural areas.
    Foremost, the committee needs to strongly consider the pro-
growth policies again of the TCJA. That certainly cannot be 
overstated.
    As I mentioned, the USA Batteries Act is a bill that would 
repeal a tax, Mr. Chairman, on domestic manufacturers, okay? 
Batteries made in the United States have this tax placed on 
them by the Biden Administration, where imported batteries do 
not have such a tax. So it is really upside down and backwards, 
which is a lot of what we have seen before.
    The U.S. leads the world in lead battery production. The 
Infrastructure Investment and Jobs Act did introduce a 
Superfund chemical tax, which again gave advantages for the 
foreign battery manufacturers. So the increased cost for 
American manufacturers has forced an unfair disadvantage while 
dealing with all the other economic pressures that, of course--
that we had. So I just urge very much consideration of the USA 
Batteries Act.
    As well, President Trump's agenda seeks to unleash American 
energy dominance. In Pennsylvania we have a generational 
opportunity to onshore American jobs and win the AI battle, but 
that is going to take an immense amount of amount of baseload 
power and new manufacturing to create these new manufacturing 
data centers. Currently, baseload nuclear energy is critical to 
supporting the existing grid. It would be a mistake to repeal 
the 45U Nuclear Production Tax Credit, a performance-based, 
means-tested tax credit that supports 94 nuclear reactors 
nationwide. I certainly encourage my colleagues to consider 
this very important tax credit as we consider the future of AI 
growth and how nuclear energy will assure that that allows USA 
to be dominant.
    The committee also should give strong consideration to 
restore the tax deductibility for intangible drilling costs, 
which has been something that has existed for a long time here 
in the United States. This, of course, promotes domestic energy 
production in a significant manner.
    Along, as well, there is something known as the DME relief, 
which is a fix for the DME suppliers. In the past the DME has 
been reduced due to, frankly, unfair treatment by CMS. And we 
need to restart a blended program via the competitive bidding 
program. This flawed reimbursement rate has caused a 21 percent 
reduction in the Medicare payment. And it is known as the 
DMEPOS Relief Act, and I strongly encourage that to be included 
in reconciliation.
    Another area the committee must also examine to ensure 
patient access to health care services is the need to fix the 
physician fee schedule, which I think you are very well aware 
of, whereby from anesthesiologists, particularly in rural 
areas, receive far less in reimbursement than it costs them to 
perform the service.
    So with that, Mr. Chairman, and all those members of the 
committee, we certainly appreciate your consideration.
    [The statement of Mr. Meuser follows:]

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    Mr. MEUSER. I yield back.
    Chairman SMITH. Thank you. I now recognize Representative 
William Timmons, the gentleman from South Carolina. In addition 
to his service to Congress on the Financial Services Committee, 
Mr. Timmons also serves as a JAG officer for--and captain for--
the South Carolina Air National Guard.
    Welcome to the Ways and Means Committee.

  STATEMENT OF THE HON. WILLIAM TIMMONS, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF SOUTH CAROLINA

    Mr. TIMMONS. Thank you, Mr. Chairman. Chairman Smith and 
members of the Ways and Means Committee, thank you for holding 
this hearing and allowing us to testify before you today. I am 
grateful for this opportunity because I am excited to work with 
President Trump and his administration to quickly deliver 
economic relief to the American people by extending his 
successful tax reforms as soon as possible to get our country 
and our economy back on track. American workers and families 
are counting on us, and it is time to roll up our sleeves and 
get to work.
    While many of us have unique ideas and our priorities of 
what should be included in the reconciliation bill, today I 
would like to focus on something I believe should be included 
as an offset. Yes, Mr. Chairman, I am here to help you find 
ways to pay for reconciliation.
    I would like to bring to this committee's attention my bill 
to crack down on pandemic era fraud, H.R. 324, the PPP Shell 
Company Discovery Act. It represents a decisive step in 
cracking down on the unprecedented fraud that plagued the 
Paycheck Protection Program during the pandemic. PPP was a 
lifeline during one of the darkest periods in recent history. 
It was designed to save jobs, support struggling businesses, 
and ensure hard-working Americans could weather the storm. But 
while millions of small businesses use this program to stay 
afloat, some unscrupulous individuals saw it as an opportunity 
to steal from the American people.
    With estimates of PPP loan fraud reaching as high as $100 
billion--I am going to say it again, $100 billion--it is 
evident that action must be taken to ensure accountability. The 
PPP Shell Company Discovery Act does just that.
    This bill creates a simple yet effective report to identify 
potentially fraudulent activity by targeting two critical 
discrepancies: recipients who had no tax withholdings in 2019, 
and those who received loans far exceeding their actual payroll 
expenses. These red flags provide a clear roadmap for the 
Department of Justice to investigate and prosecute those who 
defrauded this vital program.
    To be clear, all I am asking is to instruct the IRS and the 
SBA to run a report to give the Department of Justice and the 
FBI a roadmap to holding these criminals accountable and 
recover as much of the stolen money as possible. All this would 
do was give the FBI probable cause to get a warrant to proceed 
with their investigation. But if either one of these metrics is 
accurate, and the discrepancy is substantial, it is very clear 
that this is all that the FBI would need to hold them 
accountable. This legislation is about cutting through the 
existing bureaucratic hurdles that are holding us back from 
bridging--from bringing these criminals to justice. The tools 
to identify fraud already exist. What we need to do is act and 
get the federal government to share information.
    The scale of this fraud is staggering. It represents one of 
the largest thefts in American history. For every dollar 
stolen, a legitimate small business was left hanging. For every 
fraudulent loan approved, an honest employer struggled to make 
payroll. This isn't just theft from the federal government; it 
is theft from hard-working Americans.
    My bill will allow us to not only bring these fraudsters to 
justice, but also reclaim tens of billions of dollars that 
rightfully belong to the American people, and then allow us to 
use it in reconciliation as an offset.
    President Trump was given a mandate from the American 
people, and our Republican majority must keep our promises to 
deliver much-needed economic relief, cut government waste, and 
restore the rule of law.
    Again, I would like to thank Chairman Smith and the members 
of this committee for having me today. I look forward to 
working with you to deliver timely economic relief to the 
American people this year.
    [The statement of Mr. Timmons follows:]

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    Mr. TIMMONS. And with that, Mr. Chairman, I yield back. 
Thank you.
    Chairman SMITH. Thank you, Mr. Timmons. I now recognize 
Representative Miller-Meeks, the gentlewoman from Iowa. Not 
only is she a doctor and a leader in public health, but she is 
a strong voice for family farmers in Iowa.
    Welcome to the Ways and Means Committee.

STATEMENT OF THE HON. MARIANETTE MILLER-MEEKS, A REPRESENTATIVE 
               IN CONGRESS FROM THE STATE OF IOWA

    Mrs. MILLER-MEEKS. Thank you so much, Chairman Smith, 
Ranking Member Neal, members of the committee. Thank you for 
allowing me to testify before this committee today. Like you 
all, I am very excited to get to work on President Trump's 
agenda and the American-first agenda. Thank you for the 
opportunity to share my tax priorities for the 119th Congress.
    As the representative for Iowa's 1st district and a member 
of the Energy and Commerce Committee and the chairwoman of the 
Conservative Climate Caucus, I represent America's heartland, 
where agriculture and energy production come together to 
strengthen our nation's energy independence while maintaining 
some of the lowest electricity prices in the country. This 
success story shows the vital role that American energy 
production plays in supporting our economy, strengthening our 
national security, and providing good jobs to working families.
    However, our energy sector faces significant challenges 
that demand bold action. Rising global energy demand, 
geopolitical instability, and the need for greater resilience 
in our energy systems all underscore the urgency of developing 
a comprehensive American energy strategy. We must act now to 
secure our energy future, lower costs for consumers, increase 
accessibility, and maintain our nation's competitive advantage. 
That is why I am here today to advocate for an any-of-the-above 
energy approach that leverages American innovation and unlocks 
the full potential of our diverse energy resources.
    By responsibly developing our oil and gas reserves, 
supporting the growth of renewables, and investing in cutting-
edge, clean energy technologies, we can enhance Americans' 
domestic energy production, boost our economy, and strengthen 
our national security. This approach allows us to enhance the 
reliability of our energy grid, and allows for greater 
flexibility in meeting the growing energy demands of our 
economy while reducing the risk associated with relying too 
heavily on one source. And importantly, it puts America first, 
not Brazil.
    While I believe the partisan processes used to pass the 
Inflation Reduction Act created a deeply flawed bill in many 
respects, it did include some important energy tax credits that 
are already driving transformative investments across the U.S. 
energy sector. Many of these credits have historically enjoyed 
bipartisan support, and some of those were pre-existing. Many 
of these credits have historically enjoyed bipartisan support, 
as I mentioned, and American companies are utilizing them right 
now to develop critical new energy infrastructure, spur 
innovation, and create good jobs in communities nationwide, 
including many in our districts.
    Prematurely repealing these tax credits would jeopardize 
the private investments and economic benefits they are 
delivering. As Republicans we should take a thoughtful approach 
and seek to refine and improve the IRA's energy provisions in a 
way that promotes market certainty and continues to incentivize 
a comprehensive energy strategy. As a surgeon, I would say use 
a scalpel, not a sledgehammer.
    As part of the strategy, I want to highlight five tax 
credits from the Inflation Reduction Act that are already 
driving transformative investments in American energy.
    The Clean Fuel Production Credit, 45Z, this credit is 
critical for agricultural states like Iowa. It is accelerating 
the deployment of low-carbon transportation fuels, including 
sustainable aviation fuel produced from Iowa-grown feedstocks, 
not from Brazilian feedstocks. In 2021 Iowa was the top 
producer of ethanol in the United States, generating over 4.4 
billion gallons. By creating new markets for our farmers and 
biofuel producers, 45Z can help Iowa build on this leadership 
while significantly reducing transportation emissions. 
Maintaining this market is especially important for producers 
and farmers who have already made important investments, 
planting decisions, and sacrifices as corn has dropped to 
around $4 a bushel.
    The advanced manufacturing production credit, 45X, this 
credit is powering a resurgence of domestic clean energy 
manufacturing, including in Republican districts. From wind 
turbine blades to solar panels to battery components, 45X is 
helping the U.S. build resilient supply chains and reduce 
dependance on foreign imports from countries like China.
    The carbon dioxide sequestration credit, 45Q, this credit 
is driving innovation in carbon capture, a technology that 
enjoys broad bipartisan support because of its potential to 
reduce emissions while supporting American energy production, 
supplementing the manufacturing boom by storing industrial 
emissions, keeping America beautiful. Iowa has long been at the 
forefront of carbon capture deployment, with products like the 
ADM facility in Decatur sequestering over one million tons of 
carbon dioxide annually. Extending 45Q can build on this 
progress and submit leadership U.S. leadership, in this 
essential technology.
    Then 45Y and 45A, clean energy production investment 
credits. The IRA brought in a new wave of investment by 
expanding the scope of these longstanding credits.
    I know that my time is almost over, so let me just say by 
maintaining smart incentives, turbo-charging innovation, and 
harnessing the power of markets, we can secure America's energy 
future while creating lasting jobs and opportunities. Repealing 
these credits without regard for investments already made would 
be a setback to clean energy and, importantly, economic growth, 
and put Brazil first, not America first.
    I look forward to working with my colleagues to shape an 
energy agenda that puts America first.
    [The statement of Mrs. Miller-Meeks follows:]

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    Mrs. MILLER-MEEKS. Thank you, and I yield back.
    Chairman SMITH. Thank you. Thank you, Mrs. Miller-Meeks.
    I now recognize Representative Celeste Maloy, the 
gentlewoman from Utah. Ms. Maloy is an attorney and serves on 
the powerful House Appropriations Committee. She previously 
attended our Ways and Means Committee field hearing in Salt 
Lake City back in July.
    So welcome back.

   STATEMENT OF THE HON. CELESTE MALOY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Ms. MALOY. Thank you, Mr. Chairman. I am excited to be 
here. I am grateful for the opportunity to testify on critical 
tax reforms in order to create a prosperous future for all 
Americans, and especially for the Utahns I represent.
    I urge the committee to repeal the death tax, also known as 
the estate tax. The death tax is a levy on the transfer of 
wealth from one generation to the next. And I know there is a 
perception out there that repealing it would help the most 
prosperous Americans who don't need this help. But the reality 
is it penalizes families who have spent their lives building 
businesses, farms, and legacies that they want to pass on to 
their children and grandchildren.
    In Utah small, family-owned businesses and farms are the 
backbone of our economy. Utah has more than 300,000 small 
businesses, including about 14,000 family farms. Repealing this 
tax will allow families to pass on their hard-earned assets 
without the fear of financial ruin for the next generation, the 
generation for which they have been working to build up a 
business.
    A study performed by USDA's Economic Research Service 
indicated that 98 percent of American farms are still family-
owned and operated. These families that work tirelessly for 
decades to build a successful small business, investing their 
time, energy, and resources into creating jobs, contributing to 
the local economy, and providing for their loved ones shouldn't 
have to face a hefty tax bill they may not be able to afford, 
especially after losing a loved one.
    I served on the Small Business Committee in the last 
Congress, and we need those Main Street businesses to stay 
strong. And when they stay in families, they stay in towns and 
they are the anchors of the economy, especially in rural areas.
    So thank you for your work. I want to see this tax bill get 
done in a way that makes Americans freer, more prosperous, and 
more likely to start a family business and pass it down. Thank 
you for your time.
    [The statement of Ms. Maloy follows:]

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    Ms. MALOY. I yield back.
    Chairman SMITH. Thank you very much, and I want to thank 
everyone for their testimonies. You are all dismissed from the 
panel.
    And so will the clerk please add panel six?
    [Pause.]
    Mr. KELLY [presiding]. Okay, we are now ready to welcome 
our sixth panel of the day.
    Thank you for taking time away from your busy schedules to 
testify to our committee. You each have five minutes to deliver 
your remarks.
    Representative Nellie Pou of New Jersey, you are recognized 
for five minutes.

STATEMENT OF THE HON. NELLIE POU, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW JERSEY

    Ms. POU. Thank you so very much, Mr. Chairman. Good 
afternoon. My name is Nellie Pou, and I am the new 
congresswoman representing the 9th district of the great State 
of New Jersey. It is my pleasure to offer testimony to the 
House Ways and Means Committee as you set your agenda for the 
119th Congress.
    The consideration of comprehensive changes to our Federal 
tax code this year is a momentous occasion for this committee 
and for our nation. It is an opportunity to enshrine positive 
reforms that benefit regular Americans, their families, and our 
small businesses. As our neighbors have been hurt by inflation 
and high prices these last few years, tax release--relief is 
essential for tens of millions of squeezed Americans.
    My state of New Jersey is no exception to these negative 
pressures. Like all Americans, Garden State residents have 
struggled mightily. But our struggle has also been compounded 
by the capping of the State and Local Tax deduction by the 
state tax law enacted in 2017. Any financial relief for our 
state begins with undoing this mistake. I am here today to urge 
you to remove the cap on the State and Local Tax deduction. The 
simplest action this committee could take would be taking no 
action at all, allowing the 2017 cap to expire as was written 
into the law.
    New Jerseyans pay some of the highest property taxes in our 
whole--in the entire country. For many years the State and 
Local Tax deduction helped us shoulder this burden. The State 
and Local Tax deduction provided a vital conduit for our 
families by putting money into the pockets of regular 
Americans. There are many misconceptions or outright falsehoods 
circulating about the State and Local Tax deduction.
    Let me be clear. The State and Local Tax deduction benefits 
regular Americans in New Jersey and states across the nation. I 
am speaking about middle-class families who are trying to make 
ends meet, including teachers seeking to meet mortgages, police 
officers making tuition payments, and firefighters looking to 
pay for their families' vacations. These are not multi-
millionaires, they are just hard-working Americans.
    At the same time, the former State and Local Tax deduction 
has helped our cities and towns shoulder their own burdens. It 
has helped our local government pay for essential services upon 
which our communities rely every single day. The limiting of 
our State and Local Tax deduction has, in turn, hampered the 
ability of our municipal governments to function at their best.
    Even though I am new to the U.S. Congress, I understand the 
role of this committee in developing our tax laws. For almost 
20 years my predecessor, Congressman Bill Pascrell, Jr., was a 
member of this panel. Many of you know Bill well, or knew Bill. 
While he sat on your dais he argued passionately and vehemently 
against the SALT cap, for its restoration. For him its 
restoration may have been his biggest priority. Like 
Congressman Pascrell, I believe the capping of the State and 
Local Tax deduction has been deeply unfair to New Jerseyans. I 
share his passion on this subject. The Garden State residents 
are known for their directness, and I am no exception. Any 
comprehensive Federal tax law legislation must undo the State 
and Local Tax deduction cap to earn my support.
    I look forward to working with the committee on this issue 
and all--and on all other ways to help hard-working families 
from New Jersey like expanding the Child Tax Credit, reducing 
health care costs, and strengthening Social Security.
    I thank you for the opportunity to testify before this 
committee. Thank you, Mr. Chair.
    [The statement of Ms. Pou follows:]

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    Mr. KELLY. Thank you, Ms. Pou. I now recognize 
Representative Burgess Owens from Utah. Mr. Owens is no 
stranger to the Ways and Means Committee, having joined us for 
our field hearing in Salt Lake City and our Member Day hearing 
last Congress, and he is now the second NFL Super Bowl champion 
to have testified before the committee.
    Mr. Owens.

   STATEMENT OF THE HON. BURGESS OWENS, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. OWENS. Thank you, Mr. Chair, I appreciate that. 
Chairman, Ranking Member Neal, and members of the committee, 
thank you for the opportunity to testify today. I am here to 
advocate for legislation shared between this committee and the 
Committee on Education and Workforce, on which I serve as vice 
chair.
    Here shortly I will be introducing the Educational Choice 
for Children Act, the ECCA, along with my friend Adrian Smith, 
a senior member of this committee and a tireless advocate for 
school choice. The ECCA passed through this committee last 
September. I first introduced this in the 117th Congress with 
my late colleague and our beloved friend, Jackie Walorski. 
Jackie was a joyful champion of policies to ensure every child, 
every parent had resources and education they needed to 
succeed. This bill is a fitting tribute to her legacy.
    By offering parents and students more educational options, 
we create more and better options that empower generations to 
make their American dream a reality. This was true for me 
growing up in the segregated South, and it can be for so many 
children today trapped in a cycle of forgotten dreams and lost 
hope.
    Our bill is based on a wildly popular and incredibly 
successful state program. Like the Children First Educational 
Fund in my home state of Utah, these programs are designed to 
address many concerns of direct government funding for 
scholarships. Because the ECCA provides a refundable tax credit 
to support scholarships, it diverts no existing funding away 
from public schools. Any fearmongering saying otherwise is just 
that, a fearmongering effort to keep choice and money out of 
the hands of parents.
    The ECCA can be compared to other existing tax programs, 
such as Low-Income Housing Tax Credits and the New Market Tax 
Credit, which benefits from robust bipartisan support. The ECCA 
tax credits and scholarships are administered through an 
independent Scholarship Granting Organization, SGOs. These SGOs 
both allocate non-refundable credits to donors and select those 
families who will receive scholarships, guaranteeing that 
students in all parts of the country, not just cities and 
suburbs, can participate.
    The choice model has already proven to be both sustainable 
and successful for recipients of children's scholarship funds 
across the country. In Philadelphia, 98 percent of eighth 
graders graduated from high school on time, and 70 percent of 
enrollments in some form of post-secondary education within one 
year of graduating from high school. In New York, 97 percent 
graduated from high school on time in 2024, compared to the 
most recent average in New York's public school graduation 
rates of 83.7. In Baltimore, 97 percent graduation rate with 84 
percent enrollment into college. Compare this to a 2017 
California Department of Education study, in which 75 percent 
in the most anti-choice state in our union could not pass 
standard reading and writing tests.
    An educational system that normalizes the failure to read 
and write is unconscionable, and should not be linked with the 
word ``education.'' ``Ignorant and free can never be'' harkens 
to the vision and foresight of our founders who considered 
education and pursuit of knowledge as fundamental to a free and 
open society. Our Constitution enshrines the right to life, 
liberty, and pursuit of happiness as a vision of our Heavenly 
Father that puts value on every child and every life, 
regardless of race, creed, color, or zip code.
    Unfortunately, many children across this country, 
particularly Black and Brown children, lack basic reading and 
writing skills, are discouraged from fostering pride in our 
country, and are taught to embrace victimhood as a virtue while 
perceiving hard work and merit as vices. This combination of 
challenges make the pursuit of life, liberty, and pursuit of 
happiness unattainable. Adrian Smith and I are fighting today 
for the heart and soul of our nation. This committee cannot 
accept the intellectual and educational failure of our own 
children as normal.
    This legislation assures a win-win-win-win, a win for the 
parent to see their children reach their potential, a win for 
educational community to allow competition in meritocracy, a 
win for American citizen donors seeking to reduce their tax 
burden, and a win to allow the investment of our most precious 
product, our children, to become happy, productive citizens in 
our country and in our communities.
    I look forward to continuing working with my colleagues 
here today to again pass this bill to the Ways and Means 
Committee. The ECCA is transformative, innovative, empowering 
for parents, and liberating for their children, all based on 
the agreement that every parent should have the opportunity to 
choose the best educational pathway for their own child.
    I urge this committee to expeditiously consider and pass 
the Educational Choice of Children's Act. Our children 
desperately need it.
    [The statement of Mr. Owens follows:]

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    Mr. OWENS. Thank you, and I yield back.
    Mr. KELLY. Thank you. I now recognize Representative Dina 
Titus, the gentlewoman from Nevada. Ms. Titus has been a 
staunch advocate for the people of Las Vegas.
    Ms. Titus, you have five minutes.

STATEMENT OF THE HON. DINA TITUS, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF NEVADA

    Ms. TITUS. Thank you very much, and thank you for this 
opportunity.
    I would like to start by addressing several outdated 
provisions in the tax code that directly impact the gaming 
industry. Now, I do represent Las Vegas and southern Nevada, 
where we have long been known for gaming, but this is something 
that is very widespread now and affects many different 
districts and many of you in different ways.
    For example, sports betting is now legal and operational in 
38 states and Washington, D.C. The legal gaming industry 
supports 1.8 million jobs and $52.7 billion in direct tax 
revenue. Many of these jobs are located in my district but, as 
I said, they are across the country. Despite gaming's 
widespread acceptance, though, and economic importance to many 
of our communities, the Federal Government still imposes an 
outdated excise tax on legal sports wagers.
    The 0.025 percent Sports Betting Handles Tax, as it is 
called, and the accompanying $50-per-person head tax for sports 
book employees really serves no purpose, and only empowers the 
illegal market by enabling it to offer better odds than the 
legitimate ones. You know, I once asked the IRS, where does 
this money go? What do you use it for? And they couldn't even 
answer me. They couldn't even find it. It just went in some 
pile somewhere, I guess.
    Additionally, a second outdated tax on gaming is that the 
IRS requires casinos to furnish tax forms for any jackpot over 
$1,200 from a slot machine. Now, this $1,200 threshold has not 
been updated since 1977. That means that the IRS is just 
flooded with hundreds of thousands of these tax forms for 
customers who hit minimum jackpots and don't owe any taxes at 
the end of the day.
    Furthermore, the patrons have to wait a long time for the 
tax forms to come, get filled out, they shut down the machines, 
closes off the floor. This slows down the industry, as well as 
the customer. Updating this threshold to $5,000 and indexing it 
to inflation is what the IRS's own advisory committee has 
endorsed. And if we do that, it would be beneficial, as I said, 
to operators, customers, and the government.
    So I strongly urge this committee to look at those two 
outdated provisions of the tax code. I am the co-chair of the 
Gaming Caucus. We will be coming with this legislation. It has 
bipartisan support, and I hope you that you will consider it 
this Congress.
    Next I want to turn to another business that has outdated 
tax treatment, and that is the cannabis industry. I seem to be 
advocating for all the vices here this morning; I apologize for 
that. Like gaming, cannabis has now spread to many states, and 
it is a legitimate source of jobs and tax revenue. It is legal 
for medical purposes in 39 states and regional uses in 24 
states. Despite this, the outdated scheduling of cannabis as a 
schedule I drug means that those who work in the legitimate 
industry in those states where it is legal have to jump through 
hoops to operate just like any other small business does.
    Under the purview of this committee is section 280E of the 
tax code that prohibits businesses that traffic in schedule I 
and II drugs from deducting ordinary business expenses. Section 
280E drastically increases prices for consumers and harms 
businesses that are legitimate in these states, thereby sending 
people to the illegitimate market where prices are lower. 
Again, as co-chair of the Cannabis Caucus, I hope we can--I can 
work with this committee to see that we can begin to treat 
cannabis businesses like any other small businesses that 
operate in so many of our districts.
    Third--and you have been hearing a lot about this lately--I 
want to touch on taxation of tax--tipped income. I am 
supportive of exempting tips from taxation only if it is 
coupled with an increase in the minimum wage, elimination of 
the tipped sub-minimum wage, and protections to prevent abuse. 
We have to ensure that the tax code uplifts everyone, but does 
so in a fair way.
    Finally, on an issue that is very important in my district, 
is Social Security. I have a lot of seniors in my district, as 
many of you do, and Social Security is unquestionably one of 
the most successful programs we have had in our history. Over 
144,000 people who live in my 1st congressional district 
receive $250 a month from Social Security benefits. The program 
is 89 years old. It has been working well. I hope that the 
committee will build on the Social Security Fairness Act that 
was passed by the last Congress, and continue to look for ways 
to strengthen Social Security and perhaps broaden it so that it 
stays solvent and stays there as that lifesaver that so many of 
our constituents need.
    So those are our priorities, things that I look forward to 
working with you all on, and thank you for your attention.
    [The statement of Ms. Titus follows:]

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    Mr. KELLY. Yes, ma'am. Thank you, Ms. Titus. I now 
recognize Representative Derrick Van Orden, the gentleman from 
Wisconsin. Mr. Van Orden is a Navy SEAL who served multiple 
tours overseas, and continues his service as an outspoken 
champion for southwestern Wisconsin in Congress.
    Mr. Van Orden, you are recognized for five minutes.

 STATEMENT OF THE HON. DERRICK VAN ORDEN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Mr. VAN ORDEN. Thank you, Mr. Chairman. I deeply appreciate 
the opportunity to come here and speak in this rather fancy 
room. I will give it to you, I am on the Agriculture Committee, 
the VA Committee, and also on Armed Services, and it is 
wonderful to be here. And I would like to thank all the 
distinguished members for having me today.
    As we are discussing the upcoming reconciliation package 
and the expiration of various tax provisions at the end of the 
fiscal year, I am here today to emphasize three key points that 
must be included in this package: the first is the no tax on 
tips; no tax on Social Security; and the extension of President 
Trump's Tax Cuts and Jobs Act, or the TCJA.
    I have been supporting myself financially since I was 16 
years old. I joined the Navy at 18. In those intervening years 
I worked in the hospitality industry, in restaurants. And as a 
young man, a teenager, having to pay this tax bill on my tips 
that would come in every day was very disconcerting, and it 
made life very, very difficult. Our service workers and people 
that are depending on these tips often times are not 
recognized, and they need to be so recognized. And we have to 
have to understand the dignity of labor and getting them to 
stay in these critical fields. So I very, very strongly support 
the no tax on tips.
    Our seniors built this nation. They are responsible for the 
building that we are sitting in, they are responsible for the 
freedoms that we enjoy, and they must be respected as so. To 
have our seniors being concerned that their Social Security 
benefits are being taxed and making it more difficult for them 
to live is simply unacceptable. So I stand very strongly in 
support, and I was very happy to cosponsor the Senior Citizens 
Tax Elimination Act last Congress, and I will be doing so again 
this Congress. And hopefully, we will get this into the 
reconciliation package so that our seniors can live a little 
bit easier in this tough economy.
    And finally, we need to extend the historic tax cuts that 
were put in place by President Trump in 2017. These tax cuts 
were responsible for the incredibly strong economy we saw under 
President Trump's first term. Provisions such as the reduction 
of individual income taxes and the expansion of the standard 
deduction have provided significant relief to Wisconsin 
families. Letting them expire would be a huge hit to the 
working-class Wisconsinites that I represent in my district.
    And moreover, measures like the 1099A deduction have played 
an essential role in enabling small and medium-sized businesses 
to achieve greater tax equity or equality with larger 
corporations, and by eliminating this deduction, it would 
jeopardize over 2.5 million jobs.
    I realize there has been a lot of conversations about the 
cost of these extensions, but I urge my colleagues here to be 
cautious by following the CBO's advice. The Congressional 
Budget Office has consistently proven to be inaccurate in their 
in their estimates, so I want to make sure that everybody 
understands that--let's go into this with our eyes wide open 
and really look at the CBO's estimates and take them for what 
they are, which is nearly useless.
    Mr. Chairman and members of the committee, the policies I 
have outlined today--no tax on tips, no tax on Social Security, 
and the extension of President Trump's TCJA, are essential to 
safeguarding the financial security of families in Wisconsin 
and across this country. These measures will support hard-
working Americans, alleviate the burden of inflation, and 
continue the economic momentum that we are starting to build 
under President Trump's second term.
    [The statement of Mr. Van Orden follows:]

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    Mr. VAN ORDEN. And with that I yield back.
    Mr. KELLY. Mr. Van Orden, again, thank you for your 
service.
    We now recognize Representative Riley Moore, the gentleman 
from West Virginia. Mr. Moore, is a former member of the West 
Virginia House of Delegates, and he served as West Virginia's 
25th state treasurer prior to being elected to Congress.
    Mr. Moore, five minutes.

STATEMENT OF THE HON. RILEY MOORE, A REPRESENTATIVE IN CONGRESS 
                FROM THE STATE OF WEST VIRGINIA

    Mr. MOORE of West Virginia. Thank you, Mr. Chairman, and 
thank you for hosting this Member Day hearing.
    I think the American people spoke loudly and clearly on 
November 5. They sent President Trump back to the White House 
with a resounding victory and a clear mandate to put America 
first and to make us a secure and prosperous nation once again.
    The American people also entrusted us with majorities in 
both houses of Congress to help President Trump achieve this 
historic mandate. A key pillar of President Trump's mandate is 
to make America an energy superpower. That means prioritizing 
our reliable baseload energy sources such as coal, oil, and 
natural gas. As I like to say, we need to prioritize an all-of-
the-below-the-ground strategy to make us energy dominant again.
    However, for too long this town has crushed our reliable 
baseload energy sources with devastating regulations and 
harmful policies that put ideology over energy security. 
Policies like Obama's Clean Power Plan, better known as the war 
on coal, which cost West Virginia thousands of coal jobs, and 
the so-called Inflation Reduction Act, which was a Trojan horse 
for the radical Green New Deal, have gotten us further and 
further away from energy security.
    We should be a net exporter. Instead, President Biden had 
to beg Saudi Arabia not to raise oil prices, and our coal-fired 
power plants are being shuttered at record rates. This must 
change if we truly want to make America great again. We need to 
re-prioritize our baseload energy sources as we look to repeal 
the Inflation Reduction Act, Green New Deal's tax credits in 
reconciliation.
    We should simultaneously consider harnessing our tax code 
to offer incentives for increasing reliable energy production. 
One way to do that is offering a tax credit to defray 
operations and maintenance costs for energy producers that meet 
certain production benchmarks. In 2018 Larry Bucshon of 
Indiana, along with the entire West Virginia delegation, 
introduced the Electricity Reliability and Fuel Security Act, 
which offered coal-fired power plants a temporary tax credit to 
recover up to 30 percent of the plant's operations and 
maintenance expenses.
    While I fully support the original proposal focused on 
coal, I believe we can expand the idea to ensure we aren't 
picking winners and losers, and helping bring about a total 
energy renaissance in this country. We should consider 
broadening this tax credit proposal to make all forms of energy 
eligible for this 30 percent O&M tax credit if that producer 
can maintain a certain required X amount of megawatts produced. 
We can consult with experts to help us determine the right 
amount of megawatts that must be produced to receive this tax 
credit, but I believe this proposal will both reward dependable 
baseload production, while also incentivizing other forms of 
energy to innovate and become more reliable.
    And I would note that currently in the Inflation Reduction 
Act this 30 percent tax credit does exist on operations and 
maintenance for green energy products currently, right now, 
while coal and natural gas receive zero tax credits for 
operations and maintenance.
    So I thank the chairman for the opportunity to testify 
today, and I am glad to work with the committee on this 
proposal, and I am glad to answer any questions. Thank you so 
much, Mr. Chairman.
    [The statement of Mr. Moore of West Virginia follows:]

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    Mr. MOORE of West Virginia. I yield back.
    Mr. KELLY. Thank you. We now recognize Representative 
Emilia Sykes from Ohio. The gentlewoman comes from a family of 
leaders in her state, and we are glad to have her here serving 
in Congress with us.
    Ms. Sykes.

    STATEMENT OF THE HON. EMILIA SYKES, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mrs. SYKES. Thank you, Mr. Chair, and thank you to Ranking 
Member Neal for holding this hearing today and offering members 
an opportunity to speak on tax priorities that are so important 
to our districts. I appreciate the both of you for your 
leadership in this committee, and I look forward to working 
with you to improve our nation's tax code for the people of 
Ohio's 13th congressional district and for Americans all around 
the country in this 119th Congress.
    Before speaking on priorities for the upcoming Congress, I 
want to highlight a policy from the 118th that is driving the 
conversation in my home district. It is the Social Security 
Fairness Act. The Social Security Fairness Act eliminates the 
windfall elimination provision in the government pension offset 
from the Social Security Act, which previously prevented public 
service employees from receiving their full Social Security 
benefits if they also received other forms of retirement 
benefits such as a pension. There is no good reason why 
teachers, firefighters, and other public service employees who 
have earned their retirement benefits should not receive them. 
Again, they earned these benefits and they should not have been 
penalized for working hard.
    Ohio is especially going to benefit from this piece of 
legislation, with the Congressional Research Commission 
indicating over 230,000 Ohioans will be eligible for increased 
benefits because of this law. The Social Security Fairness Act 
is not just important because it provides relief to thousands 
of my constituents who were frustrated and are frustrated they 
couldn't receive their full benefits, it also demonstrates what 
Congress is capable of when we work together in a bipartisan 
fashion.
    Mr. Chairman and members of the committee, there is not a 
single place I have gone in the last few weeks back at home 
where someone has not stopped me to thank me for the work that 
Congress did to ensure that the Social Security Fairness Act 
was passed and signed into law. Whether it was a retired 
firefighter or a widowed teacher who could not get the full 
benefits--survivor benefits from her late husband, there are 
people all across Ohio's 13th congressional district and this 
country who have much more greater economic opportunities 
because of this bill. We should keep this example of 
bipartisanship in mind as we prepare for the upcoming tax 
debate.
    With so many provisions from the Tax Cuts and Jobs Act 
expiring, we have a great opportunity to lower costs for the 
American people and give families a better chance at the 
American dream. For example, Congress could expand the Earned 
Income Tax Credit by doubling the credit percentage for 
families with children and reinstate the expansion of the Child 
Tax Credit, which cut poverty nearly in half when it was fully 
implemented. Putting more money in people's pockets of the 
individuals who work hard but struggle to make ends meet should 
be a top priority for all of us.
    Both of these policies are included in my first bill of the 
119th Congress, the Lower Your Taxes Act, which, if 
implemented, would expand the middle class by reducing costs 
and expanding opportunity for everyday working families. 
Further, this legislation incentivizes work and self-
sufficiency, a goal that I know everyone in this room and on 
this committee has.
    This bill would also reverse some of the unpopular policies 
of the Tax Cuts and Jobs Act by shifting the tax burden from 
low and middle-class Americans back to the corporations who are 
currently not paying their fair share. There is no reason why 
line cooks, firefighters, and teachers are taking more of the 
tax burden on than rich corporate billionaire corporations.
    We instead know that the best way to deliver for American 
families and workers is to invest in American families and 
workers, and not greedy corporations. This year's tax debate 
gives us a chance to do right by the American public and ensure 
that they can make ends meet in the face of rising costs and 
put more money in their pockets, which, by the way, Mr. Chair, 
is their money. I hope this committee takes these issues into 
consideration as we look to improve the lives of America's 
hardest workers, including those in my community, in my 
district, the birthplace of champions, Ohio's 13th 
congressional district.
    Thank you, Mr. Chair. I appreciate the opportunity to 
address the committee, and I yield back.
    [The statement of Mrs. Sykes follows:]

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    Chairman SMITH [presiding]. Thank you. I recognize 
Representative Dale Strong, the gentleman from Alabama with a 
heart for service. Mr. Strong has spent his entire career as a 
dedicated first responder. He now serves the community as a 
Member of Congress and on the Appropriations, Homeland 
Security.
    Welcome to the committee.

STATEMENT OF THE HON. DALE STRONG, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ALABAMA

    Mr. STRONG. Thank you, Chairman Smith, distinguished 
members of this committee. Thank you for the opportunity to 
stand up for businesses and workers in north Alabama. I am 
proud to speak on behalf of American jobs, American 
competitiveness, and our future as the world's leader in 
innovation.
    The 2017 Tax Cuts and Jobs Act was a game-changer for our 
nation. It unleashed the full potential of our economy, 
strengthened America's businesses, and help create high-paying 
jobs in communities across our country. To keep the United 
States competitive on the global stage, create new jobs, and 
grow our economy, we must restore these crucial tax provisions, 
starting with the immediate expensing of research and 
development.
    Throughout north Alabama, businesses depend on the ability 
to immediately deduct R&D expenses so they can reinvest in 
their products, their employees, and their communities. This is 
truly an investment in America. Immediately expensing isn't 
just a tax provision. It is a job creator, a growth 
accelerator, and a fundamental tool that keeps American 
businesses at the cutting edge of the global economy.
    Unfortunately, nations like China continue to pour more and 
more into R&D and technology. The U.S. has fallen behind. We 
are one of only two developed countries that do not allow 
businesses to immediately write off the full cost of machinery 
and equipment. It means fewer jobs for American workers, less 
investment in American innovation, and a weakening of our 
global competitiveness.
    It is not just business that benefits from President Donald 
Trump's tax cuts. Working families do, too. The personal income 
tax cut provided working families with more take-home pay, 
which they used to reinvest in their communities and local 
economies. Americans--America's economic success depends on a 
tax code that rewards innovation, supports job creation, and 
prioritizes American workers over foreign competitors. America 
first. If we seriously talk about keeping America competitive, 
we want to ensure that we are the economic leader of the world 
stage. We cannot afford to let these provisions expire. Our 
time is now.
    [The statement of Mr. Strong follows:]

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    Mr. STRONG. Mr. Chairman, I yield back.
    Chairman SMITH. Thank you. I now recognize the 
congresswoman from American Samoa, Mrs. Radewagen. This is not 
her first time with the Ways and Means Committee. We had the 
great opportunity to travel together to Southeast Asia to 
discuss the issues of China's aggression over there.
    It is great to have you back with us on the committee.

STATEMENT OF THE HON. AUMUA AMATA COLEMAN RADEWAGEN, A DELEGATE 
        IN CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA

    Mrs. RADEWAGEN. Thank you, Chairman Smith and Ranking 
Member Neal, for allowing me to submit testimony on my bill, 
H.R. 399, to permanently extend the American Samoa Economic 
Development Tax Credit.
    American Samoa relies upon the operation of a tuna cannery 
to provide economic vitality to the island. This cannery has 
become the largest private-sector employer on the island, 
providing 2,450 jobs, or approximately 25 percent of the 
island's employment. Despite the economic challenges, the 
operation of this cannery is crucial for the economic 
sustainability of American Samoa, as it, along with its 
associated fishing operations, contributes to a third of the 
island's gross domestic product.
    Other related industries on the island such as fueling, 
shipping, and stevedoring depend on the ongoing activities of 
the cannery to support their own operations. This economic 
activity has allowed American Samoan citizens to retain 
meaningful employment along with a reliable income and valuable 
fringe benefits.
    My bill, H.R. 399, would permanently extend the American 
Samoa Economic Development Credit, or ASEDC, which expired on 
January 1, 2022, after repeated renewals. The ASEDC was 
designed to encourage investment in the U.S. insular areas and 
create jobs by reducing the federal taxes on income earned by 
qualifying U.S. businesses. The credit has helped to alleviate 
significant competitive disadvantages facing businesses in the 
territory, helping companies, including the cannery, continue 
operations on U.S. soil while competitors increasingly move 
business overseas to take advantage of cheap labor and foreign 
subsidies.
    The ASEDC was routinely extended as part of an annual 
package of tax extenders since its creation in 1996 until it 
expired on January 1, 2022. The credit was typically extended 
for one to three years at a time, and had been renewed and made 
retroactive nine times since 1996. Since the credit's 
expiration, companies in American Samoa have had to consider 
either significantly reducing their operations or exploring the 
possibility of relocating to more viable economic environments. 
The American Samoan government estimates that such relocations 
could cause a financial crisis from which the island economy 
may never recover.
    The credit represents an offset of approximately a quarter 
of the cannery's annual labor costs. For comparison, relocation 
of the cannery to outside the U.S. would cut costs by nearly 
three-fourths. Competing canneries in Asia pay their workers 
the equivalent of less than $2 an hour under harsh and unsafe 
conditions. To be frank, Starkist has expressed a strong desire 
to remain in American Samoa under the U.S. flag, where U.S. 
workers' rights are better protected, but the fact remains that 
they require government support to remain competitive.
    A 2023 GAO report noted that reductions in the tuna canning 
industry would likely also affect support industries such as 
transportation, and warehousing, retail, and wholesale, and 
construction in American Samoa.
    The tax credit also represents an opportunity for further 
development of the American Samoa economy. While we are 
primarily a fishing town, the credit could be used to attract 
other industries and revenue streams for the island.
    Thank you again, Chairman Smith, Ranking Member Neal, and 
the rest of the Ways and Means Committee for the opportunity to 
speak today. Given the low cost of the credit compared to its 
immense economic benefit to American Samoa, I strongly 
encourage my colleagues to pass H.R. 399 to permanently extend 
the ASEDC.
    [The statement of Mrs. Radewagen follows:]

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    Mrs. RADEWAGEN. Thank you, Mr. Chairman, I yield back.
    Chairman SMITH. Thank you. I now recognize Representative 
Jen Kiggans, the gentlewoman from Virginia. Mrs. Kiggans is a 
United States naval veteran, helicopter pilot, and is a proud 
Navy wife and mom. She is also a former member of the Virginia 
State Senate.
    So welcome.

STATEMENT OF THE HON. JEN KIGGANS, A REPRESENTATIVE IN CONGRESS 
               FROM THE COMMONWEALTH OF VIRGINIA

    Mrs. KIGGANS. Thank you so much, Mr. Chairman and 
distinguished members of the committee.
    As we begin a new era of conservative leadership, it is 
important for Republicans to use our voices in energy and 
climate conversations so we can find common-sense, conservative 
solutions that will address our nation's energy security needs. 
One way to do that is by protecting the existing Clean Energy 
Tax Credits.
    As Republicans we support an all-of-the-above approach to 
energy development. While the Inflation Reduction Act contained 
countless harmful provisions that led to our conference wholly 
opposing its package, some of the energy tax credits included 
in the bill have led to a significant increase in domestic 
manufacturing and energy production across the country, 
including in my district.
    That is why I joined 17 of my Republican colleagues this 
past August in sending a letter to Speaker Johnson in support 
of protecting the IRA's Clean Energy Tax Credits. They have 
spurred innovation, driven billions of dollars in investment, 
and created good jobs in many parts of the country including in 
my district and many districts represented by members of our 
Republican Conference. In Virginia alone, over $445 million in 
IRA-supported private investments have been announced, 
supporting over 250 jobs. That is not to mention a new report 
showing that the combination of federal programs, Clean Energy 
Tax Credits, and clean energy investment will add $37 billion 
to the Commonwealth's economy by 2035.
    It is important to note that the IRA's Clean Energy Tax 
Credits have been traditionally bipartisan, with many being in 
existence in some form or fashion since the George W. Bush 
Administration, and others gaining bipartisan support when they 
were introduced as individual legislative proposals.
    I have seen the benefits of clean energy firsthand--again, 
in my district--through investments in offshore wind, which has 
not only brought significant economic gains and job growth, but 
is benefiting our United States Navy bases. Upgrading and 
improving our military bases continues to be a top priority of 
mine as a Navy veteran, and offshore wind has allowed us to 
harness the power of America's renewable energy to support the 
countless military installations along the Atlantic coast. As 
someone who represents one of the most military-heavy districts 
in the country, I know that energy security is national 
security.
    The public-private partnership with the wind turbine 
industry in my district will allow upgrades to a very outdated 
power grid at our Navy's east coast master jet base, Naval Air 
Station Oceana.
    While we continue working to unleash American energy, we 
cannot turn a blind eye to the benefits these Clean Energy Tax 
Credits provide, and how they are actively helping our armed 
forces, small businesses, and American families. The bottom 
line is that, in order to increase American energy dominance 
and bolster our domestic energy security, we need to protect as 
much production and innovation as possible. These Clean Energy 
Tax Credits have helped accomplish that goal.
    At a time when energy demands continue to skyrocket, the 
repeal of these credits would have a significant negative 
impact on the United States' ability to counter growing threats 
from the Chinese Communist Party's activity in the energy 
sector. We need to be pragmatic in our approach to unleashing 
American energy independence. We must put America first by 
prioritizing domestic energy production and protecting our 
existing clean energy tax credits. I hope I can count on your 
support to do just that.
    [The statement of Mrs. Kiggans follows:]

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    Mrs. KIGGANS. Thank you, and I yield back.
    Chairman SMITH. Thank you very much. I now recognize 
Representative G.T. Thompson, the gentleman from Pennsylvania. 
As the chairman of the great Agriculture Committee, he 
understands firsthand of how tax policy impacts our farmers and 
our families.
    It is great to have you back to Member Day.

   STATEMENT OF THE HON. GLENN THOMPSON, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. THOMPSON. Chairman, thank you so much. Thanks for this 
opportunity. Ranking Member Neal, members of the House 
Committee on Ways and Means, good afternoon and thank you for 
providing the opportunity to share my priorities for the 119th 
Congress within the committee's jurisdiction, and I believe the 
policies described will enhance the quality of life not just 
for my constituents, but for all Americans.
    I was proud to recently introduce H.R. 464. The Skills 
Investment Act is a bipartisan legislation designed to expand 
tax-advantaged savings opportunities for Americans pursuing new 
job skills and better career prospects. This legislation would 
change existing Coverdell Education Savings Accounts, ESAs, to 
create lifelong learning accounts by raising the age-based 
contribution limit to 70, and expanding the scope of allowable 
distributions to cover a broader array of in-demand education 
and skills training forums. These expanded uses include for 
programs offered by career and technical education 
institutions, adult education and literacy programing, and 
other federally-recognized workforce development initiatives.
    Additionally, employers would receive a 25 percent tax 
credit for contributions to a worker's account to ensure the 
skills and training provided meet labor market demands. As 
employers face tight labor markets and skills gaps throughout 
the workforce, this legislation directly addresses those needs 
by expanding access to skills-based educational opportunities 
for learners of all ages. It is my hope that these needed 
reforms will be included in the upcoming reconciliation 
package.
    I would also like to address several tax issues that 
significantly impact rural and agricultural communities. As 
chairman of the Committee on Agriculture, I am acutely aware of 
substantial challenges facing farmers across the nation. As 
this committee turns its attention to tax reform, I urge you to 
prioritize several key provisions in the code that are 
important to maintaining and protecting ongoing farming 
operations and, ultimately, food security, which is national 
security.
    First and foremost, it is essential that tax reform protect 
a number of provisions that were made permanent in the Tax Cuts 
and Jobs Act, including section 197 expensing, the indefinite 
carryover--or carry forward of deductions, and the 21 percent 
corporate tax rate. These permanent tools are critical to 
farmers' abilities to plan and to manage their operations each 
year.
    Similarly, there are provisions slated to expire that I 
strongly encourage the committee to either extend or make 
permanent. These include the corporate pass-through rates and 
the expanded tax brackets, the section 199A deduction, and the 
bonus depreciation provision. Together, these provisions help 
preserve farm profitability and ensure stability for 
agricultural businesses.
    In addition to preserving the essential aspects of TCJA, 
Congress has an opportunity to provide new tools to support 
farmers and ranchers during these times of economic dislocation 
in farm country. Many of these proposals are further detailed 
in my written testimony, but they include the creation of 
farmer savings accounts to allow producers to better manage 
their cash across the agricultural business cycle, 
incentivizing the consumption of domestically sourced 
agricultural products, and finally scrapping the death tax once 
and for all.
    As many of you know, the death tax places an incredible 
burden on anyone trying to plan for an orderly transition of a 
family business. At a time when older farmers and ranchers are 
passing their operations--on their operations, the return of 
this tax and the elimination of stepped-up basis threaten the 
transition with devastating tax bills.
    Beyond the policies that directly affect farmers, the 
committee should also consider the broader impact of tax 
policies on the agricultural producers and rural economy. It is 
essential that discussions surrounding these tax credits 
prioritize the productivity of farmland. Incentives that 
encourage the conversion of large areas of productive farmland 
to non-agricultural uses could have long-term negative 
consequences for food production and food security.
    Similar tax credits related to farming methods should be 
guided by clear, practical policies that support the real-world 
benefits of today's agriculture practices. For example, the 
Biden-Harris Administration's recent 45Z tax credit guidance 
reflects a lack of understanding of the emissions-reducing 
benefits inherent in American agriculture. It is my hope that 
any forthcoming tax package would implement policies that 
genuinely empower farmers and align with the realities of 
modern farming.
    I have additional priorities within the committee's 
jurisdiction that I have submitted for the record, including 
legislation that could yield significant savings for Medicare 
by cracking down on waste, fraud, and abuse with respect to 
orthotics and prosthetics.
    Thank you again, Chairman Smith, and members of this 
committee, for allowing me to express my priorities with this 
committee for the 119th Congress. I appreciate your 
consideration, and look forward to working together on these 
and other issues.
    [The statement of Mr. Thompson follows:]

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    Chairman SMITH. Thank you, Chairman Thompson. I now 
recognize Representative Hillary Scholten, the gentlewoman from 
Michigan. Ms. Scholten serves on the Transportation and 
Infrastructure and Small Business Committees, and represents 
the great people of Michigan's 3rd congressional district.

  STATEMENT OF THE HON. HILLARY SCHOLTEN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Ms. SCHOLTEN. Thank you so much, Mr. Chairman and Madam 
Ranking Member, for holding this hearing, and all the wonderful 
members of this committee. I am thrilled to be here today to 
talk about a bill I introduced just last week, H.R. 536, the 
Agricultural Environmental Stewardship Act of 2025.
    This bill is a common-sense approach to unlocking our 
domestic energy production, as it seeks to extend section 48 
investment tax credit for qualified biogas properties. The 
section 48 ITC has been around long before the Inflation 
Reduction Act, first enacted in 1962. However, the Treasury 
Department was significantly delayed in rolling out its latest 
section 48 guidance, announcing its final rulemaking just 27 
days before section 48 ITC expired on December 31, 2024. This 
has left biogas developers in the dark, as they sought to make 
major investments in America's clean energy future.
    My bipartisan bill, co-led by Mr. Valadao, will provide 
biogas developers the time and certainty to catalyze America's 
clean energy alternative production from landfills, wastewater 
treatment plants, and agricultural operations. This biogas then 
can be converted to renewable natural gas, or RNG, and then 
used as vehicle fuel or to generate electricity.
    We all know the pain our constituents are feeling at the 
pump or while paying their utility bills right now. Bolstering 
our biogas production will help our communities cut costs and 
stretch their dollars. This tax credit will also promote energy 
investments and job growth in local communities across America, 
including in districts represented by my colleagues here on 
this dais.
    I have seen the benefits firsthand in my community, as west 
Michigan is home to many farms utilizing anaerobic digesters, 
as well as water resource recovery facilities generating 
biogas. When it comes to energy, I strongly support an all-of-
the-above approach. Leaving the environmental concerns with 
traditional energy aside, these are limited resources. When 
they run out, they are gone.
    As a mom of two young kids, I can't help but think about 
the next generation's energy needs. As we look to lower energy 
prices now, we also need to create the fuels of tomorrow today 
so we are ready. This bill will help us do just that. It is a 
win-win-win situation. In addition to helping producers create 
alternative energy sources and creating jobs, ramping up our 
biogas production in addition to alternative--in addition to 
other energy forms will reduce the U.S.'s dependance on foreign 
fuels, protecting our national security.
    I look forward to forward to working with my colleagues on 
the committee to get this extension across the finish line. My 
bill will save consumers money, expand domestic energy 
production, create new jobs, slash greenhouse gas emissions.
    [The statement of Ms. Scholten follows:]

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    Ms. SCHOLTEN. And with that, Mr. Chairman, I would like to 
request two letters of support--or request that these letters 
be introduced from the American Biogas Council and the 
Coalition for Renewable Natural Gas. I request they be entered 
into the record now.
    Chairman SMITH. Without objection.
    [The information follows:]

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    Ms. SCHOLTEN. Thank you for your time today. I yield back.
    Chairman SMITH. Thank you very much. I now recognize 
Representative Jeff Van Drew, the great gentleman from the 
State of New Jersey. Mr. Van Drew has served his community as a 
dentist, and now he serves them as a great Member of Congress.
    It is great to have you.

   STATEMENT OF THE HON. JEFF VAN DREW, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. VAN DREW. Thank you, Mr. Chairman. I think it was 
easier being a dentist, by the way, you know?
    Chairman Smith, Ranking Member Neal, and members of the 
committee, thank you for hosting this Member Day and allowing 
me to speak on this incredibly important subject.
    Let me be clear. President Trump is counting on us. He is 
counting on us to deliver the certainty and economic relief 
that comes from extending his historic tax cuts. This must be 
done. It fueled one of the strongest comebacks in the American 
economy in history. By locking in these tax policies now we can 
give working families, small businesses, and manufacturers the 
confidence to invest, to grow, and to sponsor.
    This bill must also go beyond the basics and address the 
challenges everyday Americans face. First, tax relief for 
working families must remain front and center. That is so 
important. It is critical. Let's expand the Child Tax Credit 
and ensure families that they can keep more of what they 
actually earn. They are breaking their back making a living, 
some of them working two jobs, some families working three and 
four jobs. Working parents should not have to choose between 
paying their bills and investing in their child's futures. And 
the Child Tax Credit should continue to be a tool for helping 
Americans.
    But let me even be more clear. The Child Tax Credit should 
not go towards the families of illegal aliens. It should not. 
That is why I introduced legislation to cut this provision from 
the Child Tax Credit, and I hope to see similar action taken in 
the very bill that we are discussing today. I would like to be 
part of that. We can no longer offer incentives that drive 
people to come to our borders illegally. We can no longer 
afford to keep paying the billions of dollars it costs to take 
care of them.
    In addition, the Child and Dependent Care Tax Credit also 
plays a crucial role in helping parents afford the high cost of 
child care so that they can work and fuel the economy. This is 
not the only provision of the tax code specifically designed to 
assist working parents, but it is the main one, and it is 
important. Expanding the CDCTC could provide families with 
much-needed relief, offset the cost of going to work, and 
ensure that parents can continue to provide for their families.
    Next, it is past time that we get our border under control. 
We all know this. I hope that we are all together in this at 
the end of the day. It is a big deal. We need robust funding in 
this bill to secure our borders, to hire more border agents, 
and enforce our immigration laws. It isn't just about safety. 
It is about protecting American workers, and it is about the 
integrity of our immigration system.
    We must also unleash American energy. We have been blessed 
with the resources to do this. American energy is the answer. 
It will increase revenues. It will place us once again in a 
dominant role on the world scene. It is critical. We should 
export energy. We should lead. We should supply all of our own 
energy. Others need to come to us, not as in the past 
administration, where we had to go begging to them.
    Maintaining the 45U year tax credit for existing nuclear 
plants is essential to preserving and strengthening this clean, 
reliable energy source. Nuclear energy is one of the main 
answers to energy in our country. It already supplies nearly 20 
percent--in my home state of New Jersey almost 40 percent. The 
mechanism, this mechanism, ensures nuclear facilities can 
confidently plan significant investments such as the $1 billion 
plant in my district, the Salem Nuclear Power Plant. It is 
important, and they are looking for reliability. They are 
looking for consistency. They don't want to know that they want 
to start a project, put a lot of money into it, and then the 
rug is pulled out from underneath them.
    Additionally, we need to strike a balance when addressing 
the SALT deduction cap. And this is what I mean by that. We 
cannot have a deduction of $100,000 or $200,000. I come from a 
blue state. It could be run better. I understand why other 
members have concerns about SALT. But we do help states in 
various ways, whether it is subsidizing corn, whether it is in 
agriculture in general, and I support that. I support the needs 
and desires of my colleagues. I also know that this is 
important to my state and many other states.
    And it isn't as if we don't raise it we are not punishing 
the people who are responsible for bad policies; we are 
punishing good taxpayers and good Americans. So we have to find 
that balance. We have to find the sweet spot where we help the 
majority of middle-class taxpayers, but we don't overburden our 
budget. I get it, I understand it. I understand the concern 
with it. I have said this directly to President Trump last 
weekend. I spoke to him today, same issue. We cannot overburden 
the budget and our reconciliation bill. At the same time, we 
need to do something. We need to have some sort of a SALT 
adjustment.
    As Congress, we routinely subsidize programs--and I 
mentioned that before--all across the country. We need to do 
something here, too. We need to cut waste, foreign programs 
that are wasteful and we need to cut funding for certain 
international organizations that continue to undermine the 
United States of States of America. We are funding the UN, and 
the UN half the time is cutting our throat. We are funding the 
World Health Organization cutting our throat. We need to cut 
subsidies for the Green New Deal. We need to cut the 
bureaucratic waste in our federal agencies. We need to cut 
federal grants to partisan research projects.
    There is a lot we can cut. We have to use a scalpel, not a 
hatchet, and that is from a dentist. We need to use that 
scalpel appropriately, and make sure that we are not cutting 
things that help good, hard-working, average American people, 
but that we are cutting the waste and, quite frankly, the 
stupidity.
    I appreciate this committee. Chairman, I appreciate you. 
You all have an unbelievably hard task and hard work.
    And by the way, I am done now. I will say this one last 
thing. We need one, big, beautiful bill.
    [The statement of Mr. Van Drew follows:]

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    Mr. VAN DREW. I yield back.
    Chairman SMITH. Thank you, Mr. Van Drew. I now recognize 
Representative Zach Nunn, the gentleman from Iowa. Mr. Nunn is 
a sixth-generation Iowan and an advocate for working families 
and farmers. He testified at our Member Day hearing last 
Congress, but also participated in our field hearing at the 
Iowa State Fair.
    It is great to have you back.

 STATEMENT OF THE HON. ZACH NUNN, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF IOWA

    Mr. NUNN. Well, Mr. Chairman, I want to say thank you very 
much and to the Ways and Means Committee, who took the time to 
exactly come to Iowa and hear directly from folks who are 
impacted by the decisions you are about to make.
    We have a critical opportunity this year to extend and 
improve the tax cuts. The legislation that we passed will play 
a major role in making the economy work again for families. I 
know this because in Iowa we led the largest tax cuts in state 
history, and our economy grew. And Mr. Chairman, I know you are 
going to do the same for our country.
    So I would like to begin with, number one, the Child Tax 
Credit. By doubling the Child Tax Credit in 2017, nearly 
400,000 Iowa families saw major relief. And now this is money 
that they are directly taking back to our communities. I spoke 
recently with Sarah, a farm mother and--has three kiddos at 
home, and I asked her what she did with her tax returns. And 
despite the surprise to some liberals, she didn't buy an 
Italian-made Ferrari with her tax credit, she put her kids 
through speech therapy and bought a water boiler so her family 
could be warm this winter. That is a direct investment in a 
community. These Child Tax Credits help not only grow families 
in support, but they grow at a local, a hometown level.
    Issue number two: adoption. Mr. Chairman, as you know, my 
wife and I recently got to adopt two incredible little girls, 
Jayna and Aliya. They have been a great part of our family. But 
the reality is, as so many here who have adopted, it is an 
expensive endeavor, and it can be challenging to bring kids 
into a safe and loving home. That is why I am fighting to help 
more low and middle-income families adopt children by taking 
advantage of the Adoption Tax Credit, making it permanent and 
fully refundable to help offset those initial costs so that 
more families have the opportunity to bring children into their 
forever home.
    Three, the Infant Tax Credit. As we all know, just years 
ago millions of parents with babies were struggling to find the 
formula they needed to just feed their kids. We must prevent 
another baby formula shortage, or be dependent on a place like 
China to provide it. My bipartisan Infant Tax Credit Act would 
create tax credits so that small baby formula manufacturers, 
including in my home state of Iowa, would be able to help 
diversify our supply chain and ensure that infant formula 
options for families across the country are available and ready 
in our time of need.
    Four, our small businesses. In my home state of Iowa, small 
businesses are more than 270,000 in total and make up 99 
percent of our state's economy. They are the lifeblood of our 
hometowns. If we allow the tax deduction to expire by inaction, 
92 percent of Iowa's Main Street businesses will be hit with a 
new 44 percent tax increase. That means closed doors, shuttered 
communities, and the hollowing out of middle America. In simple 
terms, family farms will die. That is why it is so important 
that we move forward and recognize the role our small 
businesses play.
    Five, biofuels. Not only is this important for America's 
energy independence, it unleashes the great parts of your 
districts and mine. I am thrilled that, by extending 45Z, 45B, 
and 40A, as well as other biofuel tax credits that people have 
built an industry upon, we have the opportunity to truly lead 
for not only our country, but help families at the pump and in 
their supply chain costs to drive it down for generations to 
come.
    And six, the death tax. Finally, more than half of U.S. 
farmlands in our country today are on the brink of a 
generational changeover. The family farm for all of us is on 
the line, and it has forced families to determine whether they 
can keep their farm in the family or whether they have to sell 
to places like big ag or, worse, to China. Here is a real-life 
example. A farmer friend of mine from Cass County recently 
inherited his entire family farm. And while many might think 
that is a great thing, at the same time without the death tax 
exemption, he would have been forced to pay millions. As a 
result, to preserve our family farms, to make sure that we can 
feed our country, and to provide both food security and 
national security, I am working with my Iowa colleague, Mr. 
Feenstra, on the committee today to make sure that we 
permanently repeal the death tax.
    Mr. Chairman, to the men and men and women of the Ways and 
Means Committee, you have a huge duty before you. We are 
honored to stand with you, but know this: the American people 
are watching, and they are depending on you to help lead the 
charge with our support to unleash America's greatness and make 
sure that Iowans and the country keep a little bit more money 
in their pocket. Because I guarantee you this: they will do 
more to grow our economy than anything we can do here in 
Washington.
    With that, Mr. Chairman, let's get to work.
    [The statement of Mr. Nunn follows:]

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    Mr. NUNN. Thank you very much. I yield my time.
    Chairman SMITH. Thank you, Mr. Nunn. I am now pleased to 
recognize Representative Stephanie Bice, the gentlewoman from 
Oklahoma. Mrs. Bice is a former member of the Oklahoma State 
Senate, where she was the Senate chairman of the Finance 
Committee. But more importantly, a fearless leader in the House 
of Representatives.
    Welcome to the Ways and Means.

   STATEMENT OF THE HON. STEPHANIE BICE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF OKLAHOMA

    Mrs. BICE. Thank you, Mr. Chairman, and thank you to the 
members of the committee for allowing me the opportunity to be 
here this afternoon and share with you some of the priorities 
that I hope you will consider as we look to move good policy 
this 119th Congress.
    Let me first start by saying that, you know, many of us 
here focus on families. We want to make sure that we are doing 
right by families. So the legislation that I want to offer up 
today really focuses on that. First of all, first, number one 
is the CHILD Act.
    Since the creation of Dependent Care FSAs in 1986, the 
contribution limit has remained $5,000. With the ever-
increasing cost of child care and cumulative inflation 
measuring roughly 188 percent over the 39-year period since 
these accounts were created, relief is needed for American 
families. My legislation, the CHILD Act, co-led by 
Representative Sanchez in a bipartisan way, proposes doubling 
the contribution limit to $10,000 and indexing it for inflation 
annually.
    In 2021 the average cost of cost of child care was 10 
percent of a couple's income. These employer-sponsored accounts 
can be used for after-school programs, childcare, extended 
care, day camp, sick child care, and other expenses. And I 
think it is incredibly important that we look at increasing 
this cap.
    Second, the Paid Family and Medical Leave Tax Credit 
Extension and Enhancement Act, 45S. My friend and former Ways 
and Means member, Randy Feenstra, has introduced legislation to 
extend and reform the 45S tax credit. The provision, which was 
in TCJA and expires at the end of this year, has helped many 
employers expand their paid family leave benefits for their 
workers. Rep. Feenstra's bill not only makes the credit more 
flexible, but it also increases employer awareness and makes 
the tax credit permanent. As a mother of two daughters, I was 
thankful my employer offered me paid family leave. We need to 
incentivize employers to offer paid family leave, not mandate 
it.
    I want to thank Mr. Feenstra for leading this initiative, 
and I hope to see this tax credit permanently extended.
    And lastly, Paid Family Leave Working Group. I would like 
to share with you all that for the last year and a half or so I 
have co-chaired a House bipartisan Paid Family Leave Working 
Group. And at the end of this last year our working group 
released two discussion drafts. The first is legislation I 
authored to create a modest federal incentive for states to 
offer their own paid leave programs through the use of a 
public-private partnership. This would include states who 
partner with insurance companies to offer cost-effective 
benefits, and would tie in well with the reforms proposed by 
Mr. Feenstra's 45S legislation.
    The second concept would establish an interstate paid leave 
action network, or I-PLAN, which would enable a private, non-
profit intermediary to assist with the coordination and 
harmonization of paid leave benefits across state lines. While 
working on paid family leave, stakeholders continuously told my 
office that they had to deal with a patchwork of state 
regulations and requirements. Rep. Houlahan's forthcoming 
legislation will help streamline this and help them navigate 
the benefits programs.
    Mr. Chairman, I would also like to ask unanimous consent to 
submit the following articles for the record: one, ``The End of 
the Tax Breaks Could be Very Disruptive to Business Owners''; 
two, ``Intangible Drilling Costs''; three, ``NCBA Continues to 
Push for Death Tax Relief''; and finally, ``How the Loss of 
Immediate Expensing Reduces Innovation Inputs.''
    Chairman SMITH. Without objection.
    [The information follows:]

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    Mrs. BICE. Thank you. These articles support the 
reauthorization of 199A, intangible drilling costs, the R&D tax 
credit, and the repeal of the estate death tax. And these 
provisions are discussed in almost every meeting I have with 
constituents. The repeal of the death tax and extension of the 
other credits will allow Main Street America to continue to 
grow and employ more Americans.
    Thank you for giving me the opportunity to discuss tax 
issues that are important to my constituents in Oklahoma's 5th 
congressional district.
    [The statement of Mrs. Bice follows:]

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    Mrs. BICE. And with that I yield.
    Chairman SMITH. Thank you, Mrs. Bice. I now recognize 
Representative Jim McGovern, the gentleman from Massachusetts. 
Mr. McGovern currently serves as the ranking member of the 
Rules Committee.
    Great to have you.

    STATEMENT OF THE HON. JIM McGOVERN, A REPRESENTATIVE IN 
        CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

    Mr. McGOVERN. Thank you, Mr. Chairman, and it is great to 
see my colleague, Gwen Moore, here as well. Thank you for the 
opportunity to testify today on a few of my priorities before 
the House Committee on Ways and Means.
    As this committee knows, ending hunger and improving access 
to nutritious food has been the cause of my career. And last 
Congress this committee favorably reported the bipartisan, 
bicameral, Medically Tailored Home-Delivered Meals 
Demonstration Act, which I authored with our colleagues, 
Representative Malliotakis, Representative Evans of 
Pennsylvania, and Representative Fitzpatrick of Pennsylvania, 
and Representative Pingree of Maine. It was an important step 
toward prioritizing this innovative solution to patient care 
that will save lives and save money.
    Our bipartisan bill would establish a Medicare pilot 
program to deliver medically tailored meals, nutritious meals 
designed by registered dietitian nutritionists tailored to the 
specific medical needs of a person living with a diet-affected 
disease like diabetes or congestive heart failure. Numerous 
studies have demonstrated the tremendous cost savings 
associated with medically tailored meals. They are proven 
interventions that reduce emergency room visits as well as 
inpatient hospital and skilled nursing facility admissions. 
Recent research has demonstrated that if all eligible patients 
received access to medically tailored meals, almost $1.5 
million hospitalizations could be avoided and over $13 billion 
saved in just the first year of service.
    Because of the hard work that has gone into this bill, 
there is now more bipartisan support on the Hill than ever for 
incorporating medically tailored meals into our health 
programs. A similar bipartisan effort is going on in the Senate 
with Senators Booker, Marshall, and Cassidy. And, you know, it 
is very--almost identical to our bill. We have the opportunity 
to move this bill first in the House.
    I am grateful for the support of Health Subcommittee 
Chairman Vern Buchanan for his support for this effort and for 
his continued partnership on advancing the goals of food as 
medicine. And I request that the committee mark up and send to 
the House floor for a vote the bipartisan, bicameral, Medically 
Tailored Home-Delivered Meals Demonstration Act. That is a 
concrete and incredibly important step that this committee can 
take to promote healthy living and lower health care costs.
    Additionally, I plan to reintroduce the Medical Nutrition 
Equity Act in the 119th Congress. This bill expands coverage 
under Medicare, Medicaid, and other specified Federal health 
care programs and private health insurance to include food, 
vitamins, and individual amino acids that are medically 
necessary for the management of certain digestive and metabolic 
disorders and conditions.
    In the 118th Congress, I proudly co-led this effort with 
Congressman John Rutherford of Florida. Our bicameral bill 
garnered bipartisan support in the last Congress. But medically 
necessary nutrition for management of Crohn's disease is 
routinely denied by insurance companies, while more costly 
treatments that put people at risk of medical complications are 
approved. It doesn't make any sense. All states have mandated 
testing for inherited metabolic disorders. So as a result, 
approximately 2,000 infants every year are diagnosed with one, 
and yet treatment of these disorders is uncovered and 
unavailable for far too many.
    So for many of the covered disorders, this legislation 
simply establishes treatment parity. In December of 2016 
Congress passed improved coverage for medical nutrition for 
military families enrolled in Tricare as part of the National 
Defense Authorization Act. Our bill expands coverage to include 
parents covered under Medicaid, the Children's Health Insurance 
Program, Medicare, the Federal Employee Health Benefit Program, 
and private insurance. It is narrowly written to focus on 
individuals for whom medically necessary nutrition is the 
treatment for their disease.
    I respectfully urge that you include the Medical Nutrition 
Equity Act in a hearing so that Congress may pass this 
important legislation in the 119th Congress.
    Again, I thank you all for your patience and for all that 
you do.
    [The statement of Mr. McGovern follows:]

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    Mr. McGOVERN. I yield back.
    Chairman SMITH. Thank you, Mr. McGovern. I now recognize 
Representative Buddy Carter, the gentleman from Georgia. Mr. 
Carter is a pharmacist by trade, and he is a proud member of 
the House Energy and Commerce Committee. He previously 
testified before our committee at the last Member Day.
    So welcome back.

    STATEMENT OF THE HON. BUDDY CARTER, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. CARTER. Thank you, Mr. Chairman, and thank you for 
allowing me to testify today to the second-best committee in 
Congress, the Ways and Means Committee.
    Chairman SMITH. Your time has expired. [Laughter.]
    Mr. CARTER. I bring greetings from--Mr. Chairman, Mr. 
Chairman, H.R. 262, the Disaster Reforestation Act--seriously, 
Hurricane Helene has devastated the State of Georgia. And our 
timberland, the number one forestry state in the country, we 
have more commercial timberland available and we harvest more 
timber than any other state--this is a serious, serious 
problem.
    As you all know, timber takes time. You--it might take 
anywhere from 25 to 30 years. And even if you are trying to 
grow different trees for telephone poles, it may take 40 years. 
It is a long-term investment. And when you invest in this, 
after seven years you don't have anything. You are wide open to 
just nature. And when we have a natural catastrophe like we 
have with Hurricane Helene, these people lose everything. They 
don't have any way. This is a crop. Timber is a crop. Unlike 
other crops that have insurance, there is no insurance for 
timber. That is why this bill is so vitally important.
    Think about the massive fires that we have had in L.A. 
Think about the devastation that our timberland has had with 
Hurricane Helene. Our tax codes make it extremely difficult, if 
not impossible for private forest landowners to recover after 
such a devastating event.
    And also thank goodness we have gotten disaster relief in 
the CR, and I thank all of you for voting for that, and for 
making sure that that was available. That is going to be very 
important. But if we don't get that timber that has been 
knocked down by Hurricane Helene, if we don't get it cleaned 
up, that is going to be just kindling ready to start massive 
fires, and we can't have that.
    What does the Disaster Reforestation Act do? It will amend 
the tax code to allow forest owners to deduct the full market 
value of their timber prior to the loss caused by the federally 
declared natural disaster. This is a win-win-win situation. Why 
is that? Because, further, this bill requires those landowners 
to reforest their land within five years, ensuring that the 
forest land is not converted to other uses and preserving the 
environmental and economic benefits.
    We all know about the economic benefits. Let's talk about 
the environmental benefits. Eight percent of all the pollution 
in the State of Georgia is absorbed through these carbon sinks 
that is timberland. That is extremely important to our air. We 
have a saying in south Georgia: When you breathe fresh air, get 
down on your knees and thank the farmer who planted the trees. 
And it is true. It cleans our air. It cleans our water. So that 
is why this is so very important.
    I also want to talk about the Tax Cuts and Jobs Act. I know 
that you are extending this, and I am all with you. I am chair 
of the Health Subcommittee, and most of the cuts are going to 
come from us. We are doing everything we can. But I want to ask 
you on the IRA just to please, instead of taking a sledgehammer 
to it, please take a scalpel to it.
    There are a variety of credits in that partisan IRA--and it 
was partisan--but they were modified by the law. Many of them 
either existed prior to the law, or already had bipartisan 
support and were thrown into that partisan package. So all I am 
asking you to do is to look at it carefully. If they have 
achieved what we hope to achieve, and that is bringing 
manufacturing back to America and solidify our supply chains, 
then perhaps we need to look at keeping those tax credits 
there. So I am just simply appealing to you on that.
    My last ask is about H.R. 25, the Fair Tax. And thank you 
for having a hearing on it last session. You were very kind to 
do that. Again, the Fair Tax is just what it says, it is a fair 
tax. It is a consumption tax, a 23 percent consumption tax. And 
yes, that sounds like it is a high number, and it is a high 
number. But at the same time, you are already paying that. You 
are already paying that when you buy a product anyway.
    So this would just simply eliminate the IRS. And we could 
do that, Mr. Chairman, I assure you. The fair tax's time has 
come. The President has said no tax on tips. We want to do 
that. We want to make sure that we eliminate as much as we can.
    We have got unelected bureaucrats who are armed, who are 
imposing, who have more control over your paycheck than you do. 
The fair tax changes that. And again, thank you for having a 
hearing last session. I hope that this session we can move 
forward with it.
    I thank you for the work that this important committee 
does. You do extremely important work, and I thank you for 
that.
    [The statement of Mr. Carter follows:]

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    Mr. CARTER. And I yield back.
    Chairman SMITH. Thank you, Mr. Carter.
    Before we go to Mr. Downing I will say that votes have been 
called. After Mr. Downing we will recess until after votes are 
done, and finish the hearing.
    Mr. Downing, I am pleased to recognize you. Welcome to the 
Ways and Means Committee.

    STATEMENT OF THE HON. TROY DOWNING, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF MONTANA

    Mr. DOWNING. Thank you, Chairman Smith and members of the 
committee.
    I come before you today on behalf of all Montanans to 
stress the importance of ensuring that Trump's tax cuts do not 
expire. Many of these provisions, you know, marginal tax rates, 
higher standard deduction, the 20 percent deduction for pass-
through businesses are a lifeline for hard-working Montanans.
    Now, allowing the 2017 Tax Cuts and Jobs Act to expire 
would result in a massive tax hike for my constituents. The 
average taxpayer in Montana's 2nd congressional district would 
see a staggering 26 percent tax increase.
    Now, one provision of the Trump tax cuts that is 
particularly consequential to Montanans is the estate tax, 
appropriately called the death tax. Now, the TCJA more than 
doubled the estate tax exemption, increasing from 5 million to 
11.5 million per person. Estates that fall outside of the 
exemption can face up to a 40 percent tax on the market value 
of the estate when transferring to an heir at the time of 
death. Now, if the Trump tax cuts expire, nearly 15,000 Montana 
family farms would see their death tax exemption slashed in 
half starting next year.
    Now, how is this fair? Farmers and ranchers across the 
country already face constant uncertainty from weather and 
market fluctuations. Montana is a heavy producer of cattle and 
wheat, which accounts for three-quarters of our agricultural 
cash receipts. Montana is also the largest producer of lentils 
in the United States.
    Now, American farmers and ranchers put the food on our 
tables and the clothes on our backs. Unfortunately, many people 
that want to gut the death tax exemption simply see high-asset 
values on farms and think they need to be drowned in taxes. But 
nothing could be further from the truth. Now, most of these 
farms, especially in Montana, are what we call land rich and 
cash poor, meaning many of these families do not have the cash 
to pay these exorbitant taxes.
    Now, what does this mean? This means that when a family is 
suffering from the loss of a loved one, they are then forced to 
sell equipment or the entire business just to be able to write 
a check to the IRS. The death tax is especially pernicious in 
Montana, where development pressures, thanks to conservative 
leadership in bringing jobs and growth, have increased land 
values.
    Now, let me be clear. The death tax is a punitive tax on 
families who are already grieving loss. By no means are these 
ultra-rich people avoiding paying their fair share. They are 
simply working to make sure we have food to eat, often with 
little appreciation.
    Now, tax burdens on family farms, you know, may force the 
next generation of farmers and ranchers to sell farmland to pay 
their taxes. This takes agricultural land out of production, 
reducing our ability to feed ourselves.
    Now, this is a national security issue. Throughout the 
history of humanity, you want to bring a country down the 
easiest way is to make it so it can't feed itself. So I 
strongly believe the death tax should be eliminated in its 
entirety. It only seems to cause hard-working, grieving 
families to suffer even more.
    Now, at a bare minimum, I implore the members of this 
committee to make sure that farms and ranches in Montana or the 
two million across the United States do not see a massive tax 
hike come 2026.
    Thank you for listening.
    [The statement of Mr. Downing follows:]

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    Chairman SMITH. Thank you, Mr. Downing. We will now recess 
until after the vote on the House floor ends.
    [Recess.]
    Chairman SMITH. The meeting will come back to order. We 
will start with Mr. Scott.

    STATEMENT OF THE HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. SCOTT. Thank you, Mr. Chairman.
    Several years ago I was taking a young man hunting, and he 
was a combat-disabled veteran. He stepped on a pressure plate. 
He had a Purple Heart, and he was totally and permanently 
wounded and lost both legs. And as we were traveling to where 
we were going to hunt, he told me that he worked at O'Reilly's 
Auto Parts, but that he had to be very careful about how much 
he made because if he made more than--and at the time it was 
about 1,000, maybe $1,100 a month, then he lost 100 percent of 
his Social Security benefits. And so if he worked one hour too 
long, his family ended up with less money at the end of the 
month than if he didn't work at all.
    And so, Mr. Chairman, I wrote a piece of legislation. I 
appreciate you sharing time with me to discuss it. It is named 
the Purple Heart Freedom to Work. I firmly believe that the 
number one thing we can do for our veterans is to get them back 
in the workforce.
    And basically, what the bill does--and right now--and the 
number is higher than it was when I originally wrote the bill, 
but combat disabled veterans who earn an income in excess of 
$1,550 per month lose 100 percent of their Social Security 
disability insurance for being actively engaged in the 
workforce. This is a very low limit. It discourages them from 
going back to work. And I think one of the best things we can 
do for their mental health is to get them back to work.
    I have had bipartisan support on this legislation in the 
past. The challenge with it, as you know, Mr. Chairman, is 
because it is Social Security, it is mandatory spending. I want 
this committee to know I recognize that when we are dealing 
with mandatory spending we need to make sure that we limit the 
cost. And so it is drafted very narrowly so that you have to 
have received a Purple Heart. So it is combat injuries only, 
and you have to be total and permanently disabled. So it only 
applies to that small segment of people. If we can make it work 
for them, then hopefully we can make it work for other people, 
as well.
    That is the primary reason that I am here. I appreciate you 
and Ms. Moore and your work on these issues, and would be happy 
to answer any questions on that.
    [The statement of Mr. Scott follows:]

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    Chairman SMITH. Thank you, Mr. Austin.
    Mr. SCOTT. No questions?
    Chairman SMITH. No----
    Mr. SCOTT. Can I mention one other thing, Mr.----
    Chairman SMITH. Please.
    Mr. SCOTT. Prior to becoming a Member of Congress, I spent 
20 years as an insurance broker. As you know, the federal 
estate tax exemption right now is just short of $14 million, 
and if something is not done at the end of the year it goes 
down to $7 million. I just hope, as the committee pushes 
forward, that we can get some permanency in the number. For 
families that are trying to plan, it is difficult to create a 
financial plan for the family and the transfer of the 
businesses when the estate tax threshold shifts from $14 
million to $7 million. I know people, some people, want to get 
rid of it all together. I wish we could do that. I am not naive 
to the numbers. I don't think we get there, but I would just 
ask that we get some permanency in that law.
    Thank you both for your time, and I appreciate the 
opportunity to testify.
    Chairman SMITH. Thank you for being here, Mr. Scott. I now 
recognize Representative Pete Stauber, the gentleman from 
Minnesota. Mr. Stauber is a former professional hockey player 
and a retired police officer. He participated in our Ways and 
Means Committee hearing in Kimball, Minnesota.
    It is great to have you back to the committee.

    STATEMENT OF THE HON. PETE STAUBER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MINNESOTA

    Mr. STAUBER. Thank you, Mr. Chair. I appreciate you and the 
members of the committee holding this Member Day hearing.
    I know it is a priority of this Congress, and especially 
this committee, to build on the successes of the Tax Cut and 
Jobs Act. I appreciate the opportunity to testify today 
regarding the importance of ensuring we extend these provisions 
that have expired and are set to expire.
    We know the positive impact of provisions from this 
legislation, like lowering the corporate rate, had on our 
economy and investment and we know what will happen to our 
economy if Congress fails to act. According to a recent study 
by the National Association of Manufacturers, failure to extend 
the TCJA could cost them more than 1.1 million manufacturing 
jobs.
    Our constituents sent us to Congress and put President 
Trump back in the White House because they wanted us to enact 
common-sense policies that are good for economy. Mr. Chairman, 
I appreciate the work and the outreach you are doing, and stand 
ready to work with you and this committee to get this bill to 
President Trump's desk.
    There are two other areas that I would like to briefly 
highlight and I would ask the committee to consider as they 
draft the legislation.
    First, I have authored legislation that would create parity 
for volunteer drivers. Mr. Chairman, as you know, volunteers 
are key to ensuring our seniors get the health care and other 
critical services they need, especially in rural America. 
Currently, the IRS reimbursement rate for these drivers is 
$0.14 a mile, even though the business rate of reimbursement is 
5 times that in 2025. And I believe there should be parity 
between the two, and I hope the committee can look into this 
issue.
    You see, those of us in rural Minnesota, if we don't have 
the volunteer drivers, these seniors can't get to their dental, 
their health appointments, can't get to church. The volunteer 
drivers, Mr. Chair, are not doing it for money. All we are 
asking is get the IRS reimbursable tax rate via the mileage to 
be equal.
    We are losing volunteer drivers in rural America, and it is 
not fair to our seniors when sometimes the seniors, that is all 
they have is their independence at home and that volunteer 
driver, that consistent volunteer driver who will drive them 
every day to wherever they want. It is a volunteer driver they 
know and they trust, and I think our seniors benefit from that. 
We cannot lose any more volunteer drivers in rural America 
because we don't have the transportation method to do it.
    Again, Mr. Chair, they are not there to make money. They 
are there to do anything for their communities. And I would 
really implore you to look at that and make that parity, 
please.
    And also, Mr. Chair, this committee has focused on the 
families, and especially children. One issue that is near and 
dear to my heart is adoption. This committee has looked at 
legislation to assist families with the adoption process. I 
know firsthand the difficult and cumbersome process, so I 
appreciate those efforts. We must do what we can to help 
families trying to provide homes for kids who do not have them. 
Legislation has been introduced that would expand the Adoption 
Tax Credit in certain instances, and I believe this should be a 
priority as we look to improve our tax code. Those of us who 
chose to adopt and bring these children into the families 
should be able to have the tax credit.
    You know, Mr. Chair, we are a pro-life community. We are a 
pro-life conference. This is the extension of that. Families 
that want to adopt should not be prohibited because of cost. 
And I have talked to hundreds of families after my wife and I 
adopted on their interest in adopting, but they can't afford 
it. And the tax credit for adoptions would make great strides 
in allowing these children to be brought into these loving 
homes.
    And so, Mr. Chair, I appreciate your work, and especially 
reaching out and holding these meetings. I think that, from my 
perspective, your leadership is second to none. And you are 
listening, and I ask you to consider my two points that I 
brought up.
    [The statement of Mr. Stauber follows:]

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    Mr. STAUBER. And I yield back. Thank you.
    Chairman SMITH. Thank you, Mr. Stauber. Just a quick 
question. The adoption credit that you are referring to, are 
you wanting to make that refundable so that that would help 
more families? Is----
    Mr. STAUBER. Yes.
    Chairman SMITH. Okay.
    Mr. STAUBER. Make it refundable. You see, it is between 
$30,000 and $35,000 to adopt.
    Chairman SMITH. That is a lot.
    Mr. STAUBER. There are great families that can't afford 
that. And any help, Mr. Chair, would be beneficial to the pro-
life and the family cause.
    Chairman SMITH. Thank you.
    Mr. STAUBER. I yield.
    Chairman SMITH. Thank you very much. I now recognize 
Representative Tony Wied, the gentleman from Wisconsin. Mr. 
Wied is a businessman, and is serving in his first term in 
Congress, and has a full plate with appointments to the Small 
Business Committee, Agriculture, Transportation and 
Infrastructure.
    So welcome to the Ways and Means Committee.

 STATEMENT OF THE HON. TONY WIED, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WISCONSIN

    Mr. WIED. Well, thank you. Thank you, Mr. Chairman. I 
appreciate this opportunity here at the Ways and Means 
Committee, and that is extended to me, to non-committee 
members, to speak to the priorities of my constituents in 
Wisconsin's 8th district.
    Northeast Wisconsin is home to over half a million 
taxpayers and a wide variety of small businesses who have faced 
economic uncertainty from an over-reaching and over-taxing 
federal government. From manufacturing and shipping to 
agriculture and food processing, Wisconsin's 8th congressional 
district boasts a very diverse set of industries and small 
businesses. In fact, our district is the largest dairy 
producing district east of the Mississippi.
    So for nearly 30 years I owned and operated a small 
business called Dino Stop. Our convenience stores, gas 
stations, car washes, and Little Caesar's pizza franchises 
employed hundreds of Wisconsinites over the years. I know from 
firsthand experience how difficult it is to operate and grow a 
successful small business in a very competitive industry, 
especially while dealing with burdensome government regulation 
and unpredictable tax policies. Dino Stop regularly had high 
revenues due to fuel sales, but low profit margins owing to 
stiff market competition and high operating costs.
    The section 199A tax deduction, created and signed into law 
as part of the 2017 Trump tax cuts, greatly benefits our small 
businesses, farmers, and manufacturers. Nearly three-quarters 
of people claiming the 199A deduction in 2022 had an adjusted 
gross income below $200,000. Simply put, this tax cut is for 
Main Street, not Wall Street. The deduction is also designed to 
ensure small businesses are investing in employee wages and 
benefits, a vital part of recruiting and retaining a talented 
workforce. I think we can all agree that putting more money in 
the pockets of working families is a top priority for this 
Congress and the Trump Administration.
    Section 199A ensures agriculture cooperatives are taxed on 
an equal playing field with larger corporations. The Trump tax 
cuts of 2017 reduced the corporate tax rate from 35 percent to 
21 percent, while also including section 199A to reduce the tax 
burden on sole proprietorships, partnerships, S corporations, 
and LLCs. This tax cut allows dairy producers in northeast 
Wisconsin to offset tax liabilities and invest their deductions 
in their facilities and operations.
    Finally, as I travel across northeast Wisconsin I also hear 
the need for tax certainty and the importance of extending the 
Trump tax cuts. The average taxpayer in our district will see a 
23 percent tax hike if they expire. It is my hope that we can 
work together toward a permanent and consistent tax policy that 
benefits every hard-working taxpayer in my district.
    Mr. Chairman, I strongly support making the 199A tax 
deduction permanent to provide much-needed relief to small 
businesses, working families, and farmers in my district and 
across this country. Should Congress fail to renew 199A, 52,230 
small businesses in Wisconsin's 8th district would be hit with 
an unconscionable 43.4 percent tax rate. Any limitation or 
reduction in 199A would unfairly target and hurt middle-class 
taxpayers and the small businesses who are the lifeblood of the 
economy.
    [The statement of Mr. Wied follows:]

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    Mr. WIED. Thank you again for this opportunity to testify 
today, and I yield back.
    Chairman SMITH. Ms. Moore.
    Ms. MOORE of Wisconsin. Good afternoon, Representative 
Wied. Welcome----
    Mr. WIED. Good afternoon.
    Ms. MOORE of Wisconsin [continuing]. To the Ways and Means 
Committee. I wonder if you had any comment about the dyed fuel 
problem in your district, where there is a double taxation of 
the fuels that are being transported to your district due to a 
broken pipeline?
    Mr. WIED. Correct. So we had the pipeline that used to run 
from Milwaukee up to Green Bay. And when it broke down, right 
now we are hauling that by a transport. And that is an issue 
right now that folks in the industry are getting double taxed 
on the dyed fuel. And that is something that I am very 
passionate about, and would like to propose legislation that I 
think you have, and to help out with that issue.
    Ms. MOORE of Wisconsin. Well, the chairman of the Ways and 
Means Committee is very happy that you are passionate about 
this.
    And so with that I will yield back. Thank you for your----
    Mr. WIED. All right, thank you.
    Chairman SMITH. Thank you, sir. I appreciate you being 
here.
    Mr. WIED. All right, thank you.
    Chairman SMITH. The committee will stand in recess for just 
a few moments.
    [Recess.]
    Chairman SMITH. The committee will come back to order.
    I now recognize Representative Rick Crawford, the gentleman 
from Arkansas. Mr. Crawford is an Army veteran and serves as 
chairman of the House Intelligence Committee. And today is his 
birthday.
    So happy birthday, and so welcome to the Ways and Means 
Committee.

   STATEMENT OF THE HON. RICK CRAWFORD, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    Mr. CRAWFORD. Thank you. Thank you, Chairman Smith, ranking 
Member Neal, and members of the Ways and Means Committee. Thank 
you for receiving my testimony today. I have two proposals that 
I will present back-to-back here in the interest of time.
    First, it is no secret that student loans are out of 
control in this country, and I know for a fact this pervasive 
issue affects constituents in every one of our districts. 
However, I can't support large giveaway proposals that unload 
the full burden of student loan debt from a current minority of 
U.S. adults who attended college to do the majority who did 
not. That is simply not fair. Instead, I strongly support a 
fiscally responsible middle ground where we provide Americans 
struggling under the weight of massive student loan debt better 
tools to pay back the loans they chose to take out.
    That is where my proposal for a 401(edu) plan comes in. For 
many people, especially recent graduates, their wisest 
financial option is to attack their student loan debt and its 
punishing interest before focusing on longer-term financial 
decisions like retirement. A 401(edu)--and forgive my 
ignorance, but I am just using (edu) as an example of what you 
might call this type of account--is modeled after a 401(k), it 
allows them to do that for a time. Instead of investing in an 
employee retirement plan, those funds would go straight toward 
paying down student loan principal.
    A 401(edu) also retains its pre-tax deduction status, but 
since the payments are disbursed immediately there is not a 
future tax burden on withdrawn funds as there would be for a 
401(k). And since nearly all displaced retirement withdrawals 
would fall outside the 10-year budget window, there would not 
be a large CBO score. Contribution limits for employee 
retirement would also apply to 401(edu) plans.
    People leaving college with tens of thousands, if not 
hundreds of thousands of dollars in debt often postpone their 
American dream and feel restricted from pursuing positive life 
choices such as marriage, starting a family, or buying a home. 
I understand the responsibility on the borrower for the choices 
they made, but a 401(edu) does not seek to absolve them of that 
responsibility. Instead, it offers people a choice to make a 
temporary financial sacrifice, using their own money and work 
benefits to pay off their debt burden. Providing this option 
will help millions of Americans shed the weight of their 
student loans without asking other Americans to bankroll that 
relief in full.
    Like a mortgage, there are substantial benefits for people 
who can make accelerated payments and pay off their loan in 15 
years versus 30. They gain peace of mind, the financial freedom 
of losing a monthly payment, and the extra savings from years 
of unrealized interest payments. Ultimately, a 401(edu) plan 
will provide another path for employees to take control of 
their financial future and businesses to attract talent by 
taking care of their workforce.
    Now for my second proposal. As you know, Mr. Chairman, we 
live in adjacent districts, and our districts are very much 
alike. Farming is a big part of it, and it is a risky business. 
And we don't need to look any further than just this past year: 
wildfires in the West, hurricanes in the east. A massive 
downturn in the farm economy left many farmers without much 
hope for the future.
    While some government help came eventually, for many it 
will not be enough and for others it won't be in time. However, 
even when the farm economy broadly does well, individual 
farmers can still suffer losses. A violent hail storm, for 
example, in Stuttgart, Arkansas or a local disease outbreak in 
Kennett, Missouri would devastate operations in those local 
areas while not producing destruction on a large-enough scale 
to attract supplemental federal dollars.
    In these situations, many more producers would benefit from 
a tax advantaged account they could draw on in times of need. I 
call these accounts ``frame accounts'' and my proposal is 
outlined in my bill, the Farm Risk Abatement and Mitigation 
Election, or the FRAME Act. Those frame accounts are basically 
HSAs for farmers, allowing them to exercise greater control 
over the protection of their own operations. These tax-deferred 
farm disaster saving accounts would be available to all USDA-
recognized farmers and, like Roth IRA or HSA, frame accounts 
can be administered by any local bank, giving the farmer the 
ability to manage contribution and investment as he or she sees 
fit.
    Contributions, capital gains, and dividends would be tax 
deferred, and the farmer would only be able to draw upon his or 
her account in the instance of a disaster, or they would 
otherwise incur strict penalties. To encourage initial 
investment, farmers will be eligible to write off frame account 
contributions on their tax bill. Contributions would be tax 
deductible up to $50,000 per year, with a $250,000 limit, and 
farmers will retain 10 percent of their contributions in the 
form of a tax credit during the first few years of opening the 
account. Frame accounts give the farming community the ability 
to have a self-supporting disaster plan, and over time it would 
reduce reliance on government support programs and fickle 
supplemental disaster payments.
    The farmers and bankers I have talked to like the idea of 
frame accounts and believe it would greatly benefit the farm 
economy.
    Once again, Mr. Chairman, thank you for your latitude 
allowing me the opportunity to testify today. I am happy to 
discuss either of my proposals further, and have discussion 
drafts from the past Congresses to give out to anybody that is 
interested. I can also email anybody the updated versions I am 
preparing for this Congress once the Legislative Counsel gets 
back with me on that.
    And once again, thank you for the opportunity.
    [The statement of Mr. Crawford follows:]

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    Chairman SMITH. Thank you, Chairman Crawford. I now 
recognize Tim Moore, the representative from North Carolina. 
Before coming to Congress, he was the longest-serving 
Republican speaker of the North Carolina House in state 
history, and previously he served in his local community as an 
attorney, something he and I both share, as we graduated from 
the same law school. A caucus of two in Washington, D.C. with 
us.
    Mr. Moore.
    Ms. MOORE of Wisconsin. One of the Moores.

 STATEMENT OF THE HON. TIM MOORE, A REPRESENTATIVE IN CONGRESS 
                FROM THE STATE OF NORTH CAROLINA

    Mr. MOORE of North Carolina. Thank you, Mr. Chairman. I 
appreciate you and Ranking Member Neal and the members of the 
committee for allowing me this opportunity to testify before 
you today.
    I am honored to represent North Carolina's 14th 
congressional district, an area in western North Carolina that 
exemplifies the best of what America has to offer. But we also 
have a long way to recover from the devastation of Hurricane 
Helene. I represent a lot of hard-working families, small 
businesses, and resilient communities. These folks embody the 
American spirit of grit and determination. To be frank, they 
are tough, but they are stretched thin as we put our resources 
toward rebuilding western North Carolina.
    I have promised to deliver real results for these people, 
and the best way that this committee can help to do that is by 
addressing the key provisions of the 2017 Tax Cuts and Jobs Act 
that are set to expire, adding regulatory uncertainty to an 
already difficult economic environment. Making these tax cuts 
permanent would give working families, small businesses, and 
communities in North Carolina and across the United States the 
opportunity to thrive.
    These policies are proven to promote business expansion, 
job creation, and economic growth. We cannot afford to allow 
them to expire. Just look at what the TCJA has done for our 
manufacturing sector. It made it permanent. It is projected to 
generate $284 billion in new GDP growth. In my district alone, 
over 45,000 people are employed in the manufacturing sector. 
Letting these provisions expire would do nothing but jeopardize 
this progress.
    Western North Carolina's economy also relies on small 
businesses. Our state is home to over 964,000 small businesses 
which employ nearly half of our workforce. I would submit you 
probably see similar statistics, frankly, around the country. 
These business owners have told me that without the certainty 
of the TCJA small business deductions, their ability to invest 
in new equipment, hire workers, and expand operations would be 
greatly at risk. Making these provisions permanent is not just 
good policy, it is, in fact, essential to their survival 
because if these provisions were to expire, North Carolina 
would lose five to nine million jobs, $540 billion in wages, 
and $1.1 trillion in economic output.
    Let's also not forget about our family farmers in the rural 
parts of my district who have passed down their farms from 
generation to generation, just as Representative Crawford 
talked about in his state, in Arkansas. The estate tax, better 
known as the death tax, stands to threaten these multi-
generational legacies. When a farmer passes away and their 
family faces that tax bill, they are often forced to sell the 
farm just to make ends meet. How is it fair that our government 
can lay claim to the land, equipment, and assets that families 
have spent decades building and maintaining just because a 
loved one has passed away?
    These farms are businesses, but they are also a way of 
life, and they are a vital part of feeding, clothing, and 
fueling our nation. In fact, they are a key part to our 
national security. Only a nation that can feed itself can be a 
free nation. I am proud to cosponsor the Death Tax Repeal Act 
to protect family-owned businesses and enable these multi-
generational farms to continue long after their loved ones 
pass.
    Another issue that deeply affects families as we face 
rising costs and work to turn our economy around is the Child 
Tax Credit. This credit has been a lifeline for working 
families in western North Carolina, providing financial relief 
for parents who are doing everything they can to give their 
kids a brighter future. By increasing the credit and indexing 
it to inflation, we can help families keep up with the rising 
expenses and give them the resources they need to succeed. It 
just makes sense so we can empower parents and give them a fair 
shot at the American dream.
    As we address the economic challenges facing families, we 
cannot ignore the importance of affordable and accessible 
health care. Like so many rural areas, our community also has 
struggles with families finding providers and affording what 
they do get to. Hurricane Helene has only exacerbated this 
crisis, with damaged facilities and strained resources leaving 
some communities without reliable healthcare operations. We 
need policies that incentivize providers to serve rural areas, 
reduce out-of-pocket costs, and ensure every American, 
regardless of where they live, can have access to quality care.
    Again, I want to thank the committee for giving me the 
opportunity to address these issues on behalf of the hard-
working people of North Carolina's 14th district. I will tell 
you, under the leadership of President Trump's first term we 
saw what bold, pro-growth policies can achieve: lower taxes, 
rising wages, and a booming economy. By making the Tax Cuts and 
Jobs Act permanent, expanding the Child Tax Credit, supporting 
our family farms, and addressing health care challenges we can 
bring that momentum and restore the American dream.
    [The statement of Mr. Moore of North Carolina follows:]

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    Mr. MOORE of North Carolina. Thank you, Mr. Chairman.
    Chairman SMITH. Thank you, Mr. Moore. I now recognize 
Representative Andrew Garbarino, the gentleman from New York. 
Mr. Garbarino serves on the Financial Services and the Homeland 
Security Committee, and is truly a dedicated advocate for the 
people of the 2nd congressional district in New York.
    Mr. GARBARINO. Thank you. You forgot Ethics. Good 
afternoon----
    Chairman SMITH. And he serves on the Ethics Committee, and 
we all love him. [Laughter.]
    Mr. GARBARINO. That is--I like that.

  STATEMENT OF THE HON. ANDREW GARBARINO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. GARBARINO. Good afternoon, Chairman Smith and Ranking 
Member Moore. Thank you for having me.
    The initial purpose of the SALT deduction when it was first 
implemented more than a century-and-a-half ago, was to prevent 
imposing federal taxes on top of state and local taxes already 
paid. As we all know here, the SALT deduction was capped at 
$10,000 in 2017, resulting in tax increases for many middle-
income-class families. Since the cap was implemented, hard-
working Americans from states like New York have been suffering 
from unfair double taxation, all while receiving a fraction of 
what they contribute to federal funds.
    In 2017 nearly half of my constituents, regardless of 
income, itemized their returns, compared to only 16.5 percent 
in 2021. To break this down further, nearly 61 percent of 
individuals making between $50,000 and $100,000, which isn't 
considered middle class on Long Island, claimed a SALT 
deduction, compared to 18.6 percent in 2021. These percentages 
jumped to nearly 91 percent of those making between $100,000 
and $200,000 in 2017, compared with only 27 percent in 2021. As 
for the actual State and Local Taxes paid, the average 
constituent of mine reported paying just under $33,000 in State 
and Local Taxes in 2021.
    The cap is set to expire this year. I am committed to 
ensuring that middle-class families who have suffered under its 
implementation find the relief they sorely need. And for those 
who are willing to work with me, I welcome you to join me in 
finding an equitable solution to this problem.
    Moving on to another topic, I would also like to emphasize 
the importance of preserving some of the energy tax credits 
included in the Inflation Reduction Act. The IRA was a heavily 
flawed bill that included various provisions our conference 
rightly opposed. At the same time, the energy tax credits that 
were included in this bill have proven to be incredibly 
valuable when it comes to incentivizing domestic investment, 
creating jobs, and securing American energy independence. 
Should these credits be repealed, the United States will have 
invested countless tax dollars into energy development, all for 
the benefits to never be realized.
    Further, these credits have been immensely helpful in 
providing industry certainty, which is paramount when it comes 
to long-term planning, capital allocation, and attracting 
domestic investment in the energy sector. For example, in the 
State of Missouri these credits stand to provide up to $10.7 
billion in direct investment, $18.9 billion in total economic 
activity, and over 3,000 jobs. In Louisiana these credits have 
the potential to provide up to $58.3 billion in direct 
investment, $103.6 billion in total economic activity, and over 
28,000 jobs.
    Further, Texas could enjoy up to $125.3 billion in direct 
investment, $259.4 billion in total economic activity, and see 
an increase over 51,000 jobs, while Florida could see up to 
$33.6 billion in direct investment, $66 billion in total 
economic activity, and over 22,000 jobs.
    We are at a critical time for our nation's energy future, 
and it is essential that we take a pragmatic approach to our 
energy tax framework. As has been said by Speaker Johnson 
himself, the best way to examine our nation's energy tax future 
is to use a scalpel, not a sledgehammer. I look forward to 
continuing to work with the Committee to develop an America-
first tax plan that champions fiscal responsibility and 
supports a forward-looking energy approach that ensures we can 
keep pace with domestic energy demand, counters efforts by 
foreign adversaries to gain an impressive foothold in the 
energy sector, and supports economic growth and innovation.
    Thank you very much for having me.
    [The statement of Mr. Garbarino follows:]

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    Mr. GARBARINO. I yield back.
    Chairman SMITH. Thank you, sir. I now recognize 
Representative Mike Haridopolos, the gentleman from Florida. 
Mike is a former teacher and business consultant. He spent 12 
years in the Florida legislature.
    Welcome to the Ways and Means Committee.

  STATEMENT OF THE HON. MIKE HARIDOPOLOS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. HARIDOPOLOS. Thank you, Mr. Chairman and Ranking Member 
Moore, it is an honor to be here today. And as a former history 
professor, I am confident that history can be our best guide.
    Exactly 62 years ago this Friday, in a message from 
President John F. Kennedy, he said the largest single barrier 
of full employment of our manpower and resources and to a 
higher rate of economic growth is the unrealistically heavy 
drag of Federal income taxes on private purchasing power, 
initiative, and incentive. He was right. History teaches us 
that President Kennedy's plan spurred the economy with the 1963 
tax cuts, and Ronald Reagan's cuts in 1981 and 1986. And even 
more recently in 2017, President Donald Trump and Congress 
reduced taxes and created unprecedented economic growth that 
lifted the prosperity of all Americans.
    Yes, history, especially recent history, teaches us that 
reducing taxes will be a key tool in order to grow our economy. 
That is why I am here today to represent the taxpayers in my 
district and discuss the importance of extending the 2017 Trump 
tax cuts. We all recognize that failure is not an option.
    If we do not extend the Trump tax cuts, the average 
taxpayer in my district will see a 27 percent increase in their 
taxes, and that is intolerable. Families are already struggling 
in my district with the high interest rates that have spiked 
from three to seven percent in the last four years. And that 
means, for the average home in my district, they are paying 
$1,100 more per month in just higher interest mortgage 
payments. A family of four in my district making $77,000, the 
median average in my district, would pay more than $1,600 in 
taxes more versus last year. That is the equivalent of about 
nine weeks of groceries for a typical family in my district.
    Sadly, that would not be the end of the pain if we fail to 
extend the Trump tax cuts. If we allowed the tax cuts to 
expire, nearly 80,000 families in my district would have their 
Child Tax Credit cut in half, 90 percent of the people I 
represent would have their standard deduction cut in half, over 
58,000 small businesses in my district would be hit with a 43 
percent tax increase when the 199A small business deduction 
expires.
    Mr. Chairman, as you can imagine, I won't sit by and watch 
as this happens to the workers, families, and small business 
owners in our community I have the honor of representing. We 
must act, and I urge you to act quickly to renew the Trump tax 
cuts. I pledge to you my support in this, and will deliver 
whatever assistance you need me to provide in order to meet 
this critical objective.
    And again, I thank you for this opportunity to speak today, 
and I look forward to working with you in getting these things 
done for our community.
    [The statement of Mr. Haridopolos follows:]

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    Mr. HARIDOPOLOS. And I yield back.
    Chairman SMITH. Thank you, sir. I now recognize Mike 
Lawler, the gentleman from New York. Mr. Lawler is a tireless 
advocate for his constituents in the 17th congressional 
district.
    And I am glad to have you here.

STATEMENT OF THE HON. MIKE LAWLER, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF NEW YORK

    Mr. LAWLER. Thank you, Mr. Chairman, and thank you for your 
hard work as we work through this tax bill and that of the 
committee.
    At a time when middle-class families are increasingly 
squeezed by a significant cost of living, providing real tax 
relief is imperative. And that is why I recently introduced the 
SALT Marriage Penalty Elimination Act, which is designed to 
correct an inequity that has burdened married couples across 
New York in the United States since 2017.
    The current tax code unfairly caps State and Local Tax 
deductions at $10,000 for married couples filing jointly, 
essentially penalizing them for their marital status and 
depriving them of the full deduction they rightfully deserve. 
In addition, as has often been argued over the last few years, 
the $10,000 cap overall places an undue burden on taxpayers, 
especially in states like New York. In the 119th Congress the 
bill I have introduced would increase the cap on SALT 
deductions to $100,000 for single filers and up to $200,000 for 
married couples.
    This is ultimately a question of fairness. Is it fair for 
folks across the country to be double-taxed because of where 
they live? I do not believe so.
    And the impacts of the SALT cap aren't just isolated to 
big, blue states either. The impact of the cap is being felt by 
homeowners across the country. According to data released just 
this week by Realtor.com, there are many states where the bare 
minimum home buyer purchasing a median-priced home is right up 
against or past the cap on SALT.
    The minimum required annual income for a home buyer in 
Utah, for instance, is $173,744. The State and Local Tax burden 
in Utah, according to the Tax Foundation, clocks in right at 
12.1 percent. That means many families in Utah break well 
through the SALT cap.
    How about Arizona? The minimum required annual income for a 
home buyer there is $140,470. The average State and Local Tax 
burden is 9.5 percent. So a family in Arizona making that 
amount is already past the SALT cap.
    In Wisconsin, the minimum income of $107,769 to buy the 
median-priced home, and their state and local tax burden is 
10.9 percent, another state where home-owning families are past 
the cap.
    How about Montana? The bare minimum income for a home buyer 
there is $178,017, and with an average State and Local Tax 
burden of 10.5 percent, that family is also through the cap on 
SALT.
    In North Carolina, their State and Local Tax burden clocks 
in at 9.9 percent, and the minimum income for a median-priced 
home is $117,573.
    I can go on and on, but the reality is that because of 
Biden inflation over the last few years, cost has risen 
dramatically. The average home value in my district, for 
instance, in Westchester County, has risen from $700,000 to 
$1.1 million just four years. In Rockland County, where I live, 
from $400,000 to $700,000 in just four years. Rockland and 
Westchester Counties have the highest tax burden in America. 
They pay the highest property taxes.
    And so lifting the cap on SALT is not just an issue of 
fairness, it is an issue of providing real tax relief. I mean, 
yes, I agree, states like New York need to fix their reckless 
spending and reduce the tax burden. There is a reason we lead 
the nation in out-migration. But the people who stay should not 
be penalized because of that. And so it is critically important 
that we increase the cap on SALT and really provide an 
opportunity for folks who own a home, who are paying property 
taxes, who are paying state income taxes to be able to afford 
to live in their state.
    This ultimately is an issue of fairness, and I appreciate 
the committee's willingness to work with us as we try to 
address this issue in particular within the broad tax bill. The 
Tax Cuts and Jobs Act from 2017 overwhelmingly provided real 
tax relief to American families and businesses across the 
country. Revenue is at an all-time high. But I do believe, as 
we move forward, we do need to address the $10,000 cap on SALT, 
and so I appreciate the chairman and the committee working with 
us to do just that.
    [The statement of Mr. Lawler follows:]

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    Chairman SMITH. Thank you, Mr. Lawler. It is great to have 
you before the committee. You were the last one. We have had 55 
different members of the House that has shared their priorities 
within the Ways and Means Committee today.
    I want to thank all my colleagues who participated today 
for Members Day hearing. And with that the committee stands 
adjourned.
    [Whereupon, at 2:46 p.m., the committee was adjourned.]

      

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