Detroit City Wire

The U.S. Chamber of Commerce is calling on Congress to extend the Tax Cuts and Jobs Act (TCJA) by establishing a current-policy baseline. The Detroit Regional Chamber supports this initiative and urges its members to reach out to their U.S. Congress representatives and senators.

The proposed current-policy baseline would prevent the expiration of key tax policies enacted under the TCJA, which could cost approximately $4 trillion over a decade. This approach argues that avoiding scheduled tax increases should not be considered new tax cuts; only new policies or changes would impact the budget.

Key elements affected include the pass-through income deduction, allowing S corporations to deduct up to 20% of qualified business income. In Michigan, 50% of the workforce is employed by pass-through entities, benefiting from over $4.6 billion in deductions.

Several deductions are at risk of elimination, including those for research and development and business interest. Marginal tax rates are set to increase across all brackets, while standard deductions will decrease significantly for both single and joint filers. Additionally, the state and local tax (SALT) deduction cap will drop to zero.

The reduction of the corporate tax rate from 35% to 21% remains intact. Although it is unlikely to revert during Donald Trump's administration due to Republican control, there is concern about potential shifts if anti-business legislators gain influence within a party. President Trump had promised further reductions down to 15%, but such cuts may not materialize given other fiscal commitments.