    [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

                     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   ______

                     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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        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.]

                       MEMBER SUBMISSIONS FOR THE RECORD

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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       PUBLIC SUBMISSIONS FOR THE RECORD

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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   [all]