Accountants and lawmakers split on who benefited from 2017 tax law; witnesses propose targeted reforms for Main Street

The joint hearing showcased a clear divide between members and witnesses over who benefited most from the Tax Cuts and Jobs Act of 2017 and how Congress should respond to expiring provisions.

Democratic lawmakers and Anne Zimmerman, a CPA and co‑chair of Small Business for America’s Future, argued that many TCJA benefits are skewed toward higher earners and larger firms. Zimmerman cited analyses and client examples to say Section 199A’s benefits were uneven: “The evidence clearly shows that for most small businesses, they have not” seen transformative benefits, and she said over half the total dollars went to business owners with incomes above $500,000 (as referenced in committee materials and testimony).

Republican members and several witnesses countered that many small businesses did benefit and that making the pass‑through deduction, immediate expensing and bonus depreciation permanent would preserve investment and jobs. Representative Van Dyne and others said data show the TCJA reduced the tax burden for the bottom 50% and spurred wage growth and investment in the pre‑pandemic period.

Rather than a blanket extension, Zimmerman and some members urged targeted fixes. Proposals discussed among witnesses and lawmakers included:

- A small‑business standard deduction to reduce compliance burdens and simplify filings for micro firms. - A refundable payroll or payroll‑linked credit for hiring the first employee, to reduce the risk for entrepreneurs stepping from sole proprietor to employer. - Closing corporate tax “round‑tripping” and other loopholes that Zimmerman estimated could free up tens of billions in revenue to be redirected to small‑business supports.

Witnesses and lawmakers also debated enforcement and service levels at the IRS and the role of the Small Business Administration. Zimmerman urged continued IRS modernization and better taxpayer service so small businesses can comply without disproportionate administrative burdens.

Ending: The hearing produced no legislative text but yielded a list of options lawmakers may weigh: a straight extension of current TCJA provisions, a permanent package of key business provisions, or a package of targeted supports and closures of corporate loopholes to refocus benefits on true Main Street firms.