
Cormier Featured in State Affairs: Here's What Could be Next for Federal Tax Policy
01.30.2025
TPG Senior Director of Federal Affairs Ward Cormier was, once again, featured in State Affairs' weekly newsletter, Beltway Beat. Cormier dives into potential components for addressing federal tax policy.
Here's what could be next for federal tax policy
With 2024 officially behind us, all eyes are now focused on the legislative priorities of the new 119th Congress.
While much of the Senate and media’s focus during the first 100 days will be on the consideration of President Donald Trump’s cabinet, the highest priority for the Trump administration and Republican Congress is passage of legislation addressing tax reform and immigration.
During President Trump’s first term, Congress passed his signature policy initiative, the Tax Cuts and Jobs Act. The legislation included a host of reforms to our tax system, including a reduction and simplification of individual and corporate taxes.
Also included in that bill was an expiration date for the entire package at the end of 2025. The possible sunsetting of those provisions makes consideration of a new tax package even more urgent for the 119th Congress.
With the GOP holding House and Senate majorities in 2025, as well as the White House, discussions have already begun on the key components of this legislation. Based on discussions with several of the committees of jurisdiction, the GOP is looking toward extending individual tax cuts, revising existing taxes, and introducing new credits.
With small majorities in both chambers, Republicans will utilize budget reconciliation to pass any tax package, allowing a simple majority in the Senate to advance the legislation rather than the typical 60 votes needed.
More specifically, we anticipate the new legislation to include the following:
— Extension of the 2017 individual tax cuts
— Eliminating taxes on tip wages, overtime income, and Social Security payments
— Expanding the Child Tax Credit
— Retention of the SALT deduction cap
— Decrease of corporate tax rate adjustments
— Eliminating clean energy tax credits
As a result of the election, many officials in Washington have a renewed enthusiasm for bringing efficiencies and cost savings to the federal government. This theme will play into the discussions on tax reform, as reducing taxes can increase long term deficit spending unless Congress finds offsets. Some potential offsets could include:
— Rescinding the increase in IRS Funding
— Higher tariffs on imports
— A reduction in federal program spending
— Reallocating existing funding streams
— Energy policy
— Medicaid reforms
Energy policy may be of particular interest to those on the Gulf Coast, with Majority Leader Steve Scalise indicating that he wants to expand leasing and production to increase revenues as a possible offset of some of the tax legislation.
Proposals to convert Medicaid funding to block grants or per capita caps could also be included, with the intent of providing states with more control over Medicaid spending while limiting federal funding.
Tax reform is set to be a major highlight of the 119th Congress’s work in 2025 and the Picard Group is focused on the potential impacts to our clients. Staying up to date on these discussions as well as ensuring that Congressional stakeholders are aware of potential impacts in their State and Districts will be paramount during this process.
Ward Cormier is Senior Director of Federal Affairs with The Picard Group.