House Ways and Means Chairman Kevin Brady (R-TX) recently released a “House GOP Listening Session Framework,” an outline of the House GOP approach to a second round of tax measures building on the Tax Cuts and Jobs Act (TCJA).
The “framework” is known as Tax Reform 2.0. According to the two-page document, the goal of Tax Reform 2.0 is to make permanent certain individual and small business tax cuts enacted in the TCJA, promote family savings, and spur new business innovation.
Legislation has yet to be drafted so there are few specifics at this time, but according to the 2.0 framework, lawmakers intend to:
- Offer enhanced retirement savings.
- Create a new Universal Savings Account, offering a flexible savings tool for families.
- Expand Section 529 education savings plans to include tax-free withdrawals to pay for apprenticeships, home schooling, and student loans.
- Permit families tax-free access to retirement accounts to help pay for costs associated with the birth or adoption of a child.
There is no word yet whether any changes or consolidations of education tax credits will be included.
Republicans also plan to make permanent the TCJA’s $10,000 limitation on the state and local tax deduction and could also include the indexing of capital gains for inflation.
Brady has indicated he will be ready proceed with legislation after Labor Day, but since tax measures would need support from some Democrats in order to pass, it is unlikely that Tax Reform 2.0 will move forward until the lame-duck session of Congress begins, following the elections in November. It is also possible that lawmakers may try to pass legislation making technical corrections to the TCJA during the same time frame.