members of a specific time until which the record will remain open for submission of questions for the record? sen. reed: sen. sheehy -- sen. reed: yes, mr. chairman. chair wicker: this concludes today's hearing. i want to thank the witnesses and their families, and this hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2025] >> today the house members are working on a bill that would ban transgender student-athletes from competing in girls and

women's sports, k through 12 schools. late they are week members will also consider measures related to taiwan and deporting undocumented immigrants convicted of senior citizen sex offenses and other violent crimes. live coverage when the house returns here on c-span. we take you live now to capitol hill to a house ways and means committee hearing on the potential extension of tax cuts that were passed and signed into law in 2017. we join that live in progress here on c-span. >> thank you, mr. duke. thank you, mr. chairman. >> thank you. >> mr. duke, i'm perplexed by a lot of your testimony today. you had a lot of criticism over the small business deduction. what do you consider a small business? mr. duke: i don't have a

definition. i only said small business deduction. ms. van duyne: the 199. mr. duke: those are pass-throughs. ms. van duyne: do you think the way it's being held now helps small businesses, the 33 million small business, the 99.9% of all businesses in the u.s. that are small business that are able to take advantage of this, do you think the 199-a helps them? mr. duke: it gives them a tax cut. increases -- ms. van duyne: you are concerned about the debt. as a democrat i was surprised as a democrat witness some of the ideas you held we should be concerned about the debt. we should be concerned about how much of that is owned by china. i'm curious as a volunteer in the biden-harris transition team and the person who is part of the biden administration's build back better and american rescue plan, as the white house national economic council, you are a senior policy advisor to the white house on those two bills, were you concerned at all

about the trillions of dollars in debt they added, the trillions of dollars in debt that china pay potentially own and the benefit that china got as a result of those bills? i'm assuming you were advocating against that. if you don't want additional debt, god forbid we have trillions of dollars going out the door for green new deal programs that are benefiting china. am i correct? mr. duke: the macroeconomic context matters a lot. inflation is high, unemployment -- ms. van duyne: by adding to the debt, the 20% inflation we got over the last four years i am assuming you are advocating against all those tax increases. mr. duke: every country in the world -- ms. van duyne: the 20% we got -- i assume you are against those. mr. duke: justin trudeau is facing that problem. mr. van duyne: do i not want to compare the u.s. against justin trudeau. there is a reason why that man has quit his job. mr. duke: inflation was a global sly main phenomena. ms. van duyne: if you are correct, you are the point

person -pb on the -- person on the supply chain data of the infant formula crisis of 2022. mr. duke: yes. miss: we saw how that went. i want to make sure that we are appreciating the opportunity right now to be able to correct some of the views that we are seeing, misinformed view, of the tax cuts and jobs act. you are saying that the rich experienced getting richer, the poor experienced getting poorer. in 2024, about one out of 180 american taxpayers will make $1 million or more. about 5%. based on the government's forecast, the government's own forecast in this, those erpblg a million or more in 2024 will pay an average of 776,800 in federal income taxes. which is 472 times as much as the average american taxpayer who is making between 50,000 and 100,000. the top 1% will pay an average of 31.5% 24 year, compared with

10% to 12% of the middle class, and about 0% at the bottom. the rates near the bottom can be negative because of the refundable tax credit thes -- credittings, acoyeding to the federal reserve low and middle income americans receive the largest increase in wealth during 2018 and 2019. low-income families saw their net wo*rts increase by 37% while middle income families net worth increased by 40%. in the two years after t.c.j., more than 6.6 million people were lifted out of poverty. dropping the poverty rate to 10.5%, the lowest level in u.s. history. yet we are somehow arguing that's the t.c.j. did nothing for the lower class. it blows my mind we can say that. miss silver, i want to thank you very much for your testimony. you talked about how much you were able to reinvest in your businesses after t.c.j.a. was implemented. can you talk about what the costs would be if your business -- if congress did not renew the president's tax cuts?

president trump's tax cuts? >> it's going to result in less investment in our equipment, less investment in our people. less investment over all. it would be very different to stay competitive. ms. van duyne: all the people you pay would possibly lose their jobs or get paid less? ms. silver: potentially, yeah. ms. van duyne: your job, investments would shrink. a real life example right there. mr. chairman, i ask to submit a letter from the wine and spirit whole saerls of america expressing support for the extension the small business credit into the record. >> without objection. ms. van duyne: we hear the partisan pundits the tax cuts were too big for corporations, this is not true. as part of my work on the main street tax team we talked to real business owners, and heard about successes for policies such as the small business deduction section 199-a way created over $66 billion in tax

savings for main street businesses. one business i met with in north texas was republican national distributing company where i hold a round table including roofing companies, community banks, local banks, and realtors. these are the businesses across the u.s. benefiting from this. this is why congress must act. thank you very much. i yield. >> thank you. the birthday boy of the committee, mr. feenstra. .a mr. feenstra: i want to thank each one of our witnesses. you all have great testimonies, very impressed. i think we all understand how important the tax cuts and jobs act of 2017 was to our families. to our businesses. to each of us. i think about my district, i live in a very rural part of northwest iowa, and every day we are fighting to survive that main street. that main street made up of all these small bill bakery,

hardware store, drugstore. this 199-a is so critical for their existence. if we did not have 199-a, if it sunsets they would have a 43% tax increase. what would that do to rural america? it would be devastating. to our families, it's been many times -- noted many times here it would be a 26% increase to each one of our families. where do we get those dollars? where do we get those extra tax dollars? i look back, what did it do from 2017 until now? went throw covid, this all made a difference. if we didn't have these tax cuts and jobs act, how catastrophic would it have been to our economy? we would have probably been in a deep recession, even depression. we don't -- won't ever know. we know this. we survived. that's what we have to look at. there's one thing that really bothers me. that is a double tax. i want to talk about the death tax. i introduced the death tax

repeal act and we'll reinterdues it next congress. i had over 170 members sponsor this because everyone thought it was so important. think about this. the government, when somebody dies, when somebody dies, the government puts their arm in the grave, the i.r.s. puts their arm in the grave, pull as person back out and says you owe 41% tax on everything that you accumulated in your life. think about that. 41%, pull them out of the ground and say you owe 41%. that person is ready to pay tax on most of that already. yet to pass it on, we got to pay 41% tax. that's why i am so passionate about getting rid of the death tax. i hope we can do it this coming year. especially in reconciliation. on the other side of the death tax, since we have currently we don't have -- we do have the death tax. we have estate tax. it costs approximately $18 billion for small businesses to

comply to try to figure out insurance, trusses -- trusts, to figure how to manage not to pay that 41%. $18 billion. we could save money by just getting rid of it. mr. gallagher, i want to talk about this. your family has to jump through a lot of hoops to try to salvage your business to the next generation. can you talk about that how it affects you and what compliance looks like? miss gallagher: thank you for that question. i'm passionate about it as well. primarily because i have seen the impacts of what happens when either people have not planned for it or just simply don't have the money to pay the tax. the hoops are real. the hoops that these businesses and farmers jump through is starting out with identifying

their personal goals for their family, first of all. every single one has a different story and a different need and different goal. this is not a cookie cutter pwhrapb that everybody can -- plan that everybody can put into place t takes a lot of customization and a lot of planning. and a lot of planning early. the hoops include setting up multiple entities like a number of different trust vehicles can be used. limited partnerships. l.l.c.'s. enough entities to help create the best benefit so the hares can get the -- heirs can get the most amount of money when death does occur. you have to have many appraisals done. your business has to be appraised. your real estate has to be appraised. your farm. the costs are astronomical. mr. feenstra: all the stuff you have to go through to comply with the death tax. to figure it out.

we can get rid of it, and we don't have those problems. i want to talk about one more thing. paid family medical leave tax credit. to me this is so important. you talked about this in atlanta. can you talk about how important this is to small businesses as a incentive and not a mandate? >> yes. thank you for your question. the paid medical leave act is very important to be able to retain -- you want to retain quality employees. right now it's very difficult, especially in my industry as an accountant, to find and retain quality employees. however, it's so important for small business owners to not be mandated to pay various things like paid family medical leave act. it's much more beneficial if it comes in the form of a credit. mr. feenstra: i want to thank you for that. incentivize makes all the difference in the world. we can do family medical leave. i'm passionate about that. i yield back. >> thank you, mr. schneider.

mr. schneider: thank you, mr. chairman. i thank you for having this hearing. i thank all our witnesses for share your perspectives today. ms. silver, i want to commend you. i went to your website and saw what you do in company. your investment in people especially young people bringing people into manufacturing is so important. also impressed third generation family business. before i came to congress i was a consultant. i worked with family businesses principally. and getting from the first generation to the second generation is hard. less than a quarter of all businesses make it to that point. less than 10% make it to a third generation. 1% to the fourth. it is really difficult. there are a lot of reasons for that. obviously miss gallagher, i might -- ms. gallagher, i turn to you. you might advise a lot of these businesses. the firm i work for is now part of plant moran where i know you started your career. what do you tell your clients as they approach a point where they are starting to take on too much debt? what is the cost to a family

business of having too much of a debt burden? ms. gallagher: there are a lot of different aspects of a family's finances. so debt in a silo cannot be addressed. mr. schneider: when you have too much debt, you have to service that debt. you have to start paying the interest on the debt and start paying the principal on the debt. as a business you're trying to grow. you take on debt to acquire equipment or branch off into a new business line, that's going to pay back -- pay itself back. if you are taking on debt to basically spend extravagantly, that debt service will become a huge burden. are you aware what the debt service of the united states, what the burden is at this point? ms. gallagher: no.

mr. schneider: larger than our defense budget. we are paying more in interest and service to our debt than any other line in our discretionary budget. as we stand here and we find ourselves again in this conversation about giving large cuts in taxes to people who are doing really, really well, i'm not talking about small businesses, i'm not talking about folks who are struggling to make ends meet. but to take away from programs like medicaid and investments in education to give a tax cut to people who don't really need it and add to the debt of the country so we are losing -- ms. silver you know from your experiences you are looking to make ends meet, the money that came in during the crisis, the pandemic, allowing companies to invest. i think you invested -- >> now to the floor of the u.s. house for vo