Lower Taxes, Stronger Main Street: The Benefits of the Working Families Tax Cuts (House Small Business Committee hearing, April 15, 2026)
Summary
Transcript of an April 15, 2026 House Small Business Committee hearing, Small Business Committee Document Number 119-034, on the small business effects of the Working Families Tax Cuts. Chairman Roger Williams and Ranking Member Nydia Velázquez opened. Witnesses were Garrett Watson of the Tax Foundation, Traci Tapani of Wyoming Machine, Inc., Becky Renfro Borbolla of Renfro Foods, Inc. and Michael Negron of the Center for American Progress. Scholten sent written questions to Negron, and added material includes letters from Associated Builders and Contractors, Small Business Majority and American University.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Lower Taxes, Stronger Main Street: The Benefits of the Working Families Tax Cuts (House Small Business Committee hearing, April 15, 2026).”
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LOWER TAXES, STRONGER MAIN STREET: THE
BENEFITS OF THE WORKING FAMILIES TAX CUTS
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
HEARING HELD
APRIL 15, 2026
Small Business Committee Document Number 119–034
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
63–455 WASHINGTON : 2026
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
JIMMY PATRONIS, Florida
CLAY FULLER, Georgia
NYDIA VELÁZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
MAGGIE GOODLANDER, New Hampshire
SEAN DILLON, Majority Staff Director
MELISSA JUNG, Minority Staff Director
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CONTENTS
OPENING STATEMENTS
Page
Hon. Roger Williams ................................................................................................ 1
Hon. Nydia Velázquez ............................................................................................. 3
WITNESSES
Mr. Garrett Watson, Director of Policy Analysis, Tax Foundation, Farm-
ington, AR ............................................................................................................. 5
Ms. Traci Tapani, Co-President and Owner, Wyoming Machine, Inc., Stacy,
MN ......................................................................................................................... 7
Ms. Becky Renfro Borbolla, Senior Vice President, Renfro Foods, Inc., Fort
Worth, TX ............................................................................................................. 8
Mr. Michael Negron, Senior Fellow for Economic Opportunity, Center for
American Progress, Washington, DC ................................................................. 10
APPENDIX
Prepared Statements:
Mr. Garrett Watson, Director of Policy Analysis, Tax Foundation, Farm-
ington, AR ...................................................................................................... 35
Ms. Traci Tapani, Co-President and Owner, Wyoming Machine, Inc.,
Stacy, MN ...................................................................................................... 43
Ms. Becky Renfro Borbolla, Senior Vice President, Renfro Foods, Inc.,
Fort Worth, TX .............................................................................................. 50
Mr. Michael Negron, Senior Fellow for Economic Opportunity, Center
for American Progress, Washington, DC .................................................... 53
Questions and Answers for the Record:
Questions from Hon. Scholten to Mr. Michael Negron and Answers from
Mr. Michael Negron ...................................................................................... 56
Additional Material for the Record:
Associated Builders and Contractors (ABC) Letter ....................................... 59
Small Business Majority Letter ...................................................................... 61
Baltimore Sun Letter ....................................................................................... 64
American University Letter ............................................................................. 68
(III)
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LOWER TAXES, STRONGER MAIN STREET:
THE BENEFITS OF THE WORKING FAMILIES
TAX CUTS
WEDNESDAY, APRIL 15, 2026
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 10:32 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams [chair-
man of the Committee] presiding.
Present: Representatives Williams, Meuser, Van Duyne, Alford,
Wied, Bresnahan, Schmidt, Velázquez, McIver, Cisneros, Morrison,
Latimer, Tran, Simon, Olszewski, and Goodlander.
Chairman WILLIAMS. I would like to welcome everybody to to-
day’s hearing. And before we get started, I would like to recognize
Congresswoman Van Duyne from the great State of Texas to lead
us in the Pledge of Allegiance and the prayer.
Would you please stand.
Ms. VAN DUYNE. We are going to go ahead and start with our
prayer for today.
Heavenly Father, grant our leaders wisdom to choose what is
right, courage to act with integrity, and humility to serve with
honor. Guide them to seek truth over power and the good of the
people above all else. Help us as citizens to be engaged, respon-
sible, and united in purpose. May our nation be led with justice,
strengthened by truth and grounded in your guidance. Amen.
If you would join me in the Pledge.
All. I pledge allegiance to the Flag of the United States of Amer-
ica, and to the Republic for which it stands, one nation, under God,
indivisible, with liberty and justice for all.
Chairman WILLIAMS. Before we begin this important hearing,
I would like to briefly note for all Members that Representative
Van Duyne and I will be hosting a roundtable in Fort Worth,
Texas, on Monday, May 4. So please contact Committee staff if you
have any questions about the logistics and the schedule of that.
That is for your information.
So good morning to everybody. I now call the Committee on
Small Business to order. Without objection, the Chair is authorized
to declare a recess of the Committee at any time.
I ask unanimous consent to name Mr. Wied from the great State
of Wisconsin as Chairman of the Subcommittee on Contracting and
Infrastructure. Without objection, so moved.
I now recognize myself for my opening statement.
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Welcome to today’s hearing titled, ‘‘Lower Taxes, Stronger Main
Street: The Benefits of the Working Families Tax Cuts.’’ To begin
with, I would like to start off and I would like to ask, who in this
room wants to pay more taxes? Raise your hand if you do.
Okay. I see none. We are going to move on.
So—which is why we will discuss how Americans and small busi-
nesses can keep more money in their pockets.
I want to also thank our witnesses for joining us today and shar-
ing their expertise and experiences. It is important to hear about
the practical realities of impact of the Working Families Tax Cuts
Act that congressional Republicans and the Trump administration
delivered for the American people. Your perspectives will help the
Committee continue to craft policy that serves the needs of small
businesses. And I also thank my colleagues for joining us as we
learn how the Working Families Tax Cut Act is benefiting Main
Street America.
Today, the Committee will examine the provisions of the Work-
ing Families Tax Cuts Act—the largest tax cuts in American his-
tory—that are especially beneficial to small businesses and Main
Street America. We will hear how these provisions provide greater
stability and predictability, enabling small businesses to make
strategic long-term business decisions with confidence.
In addition, the Committee will explore how the Working Fami-
lies Tax Cuts Act supports broader economic recovery by putting
more money back in the hands of small businesses, expanding their
capacity to invest in their businesses and strengthening the econ-
omy.
From 100 percent expensing to no tax on tips, this bill is already
putting more money back into the hardworking American pockets.
In fact, just the other day, I was dining at a restaurant in my dis-
trict, and a waitress came up to me to tell me that the no tax no
tips was allowing her to send her daughter to cheerleading camp.
This is a simple yet impactful story of how this bill supports main
street.
Small business owners have demonstrated remarkable grit and
resilience in the face of ever-evolving challenges. As a car dealer
myself, I have experienced many of these challenges right alongside
them.
The Working Families Tax Cuts Act offers critical support and
stability at a time when small businesses need it most. For a small
business to thrive, they must have the agency and flexibility to al-
locate their capital and resource in ways that reflect their unique
priorities and circumstances. The Working Families Tax Cuts Act
provides that freedom, empowering small businesses to make the
strategic decisions necessary to grow, invest, and succeed.
This hearing is an important opportunity for the Committee to
deepen its understanding of how the tax policy directly shapes its
success and stability of small business and to identify where our
work must continue. We are committed to ensuring that our Tax
Code works for small business, entrepreneurs, workers, and their
families who drive this economy.
I want to thank all of our witnesses again today for coming up
here, leaving your homes. I look forward to the conversation ahead.
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Now, with that, I yield to my friend and our distinguished Rank-
ing Member from New York, Ms. Velázquez, for her opening re-
marks.
Ms. VELÁZQUEZ. Good morning, everyone. Thank you, Mr.
Chairman, and welcome to all witnesses this morning.
Republicans have called this hearing to celebrate the One Big
Beautiful Bill or, according to their second or third rebranding at-
tempt, the Working Families Tax Cuts. It is their only policy
achievement in the past year, and it is a total disaster.
The centerpiece of this law’s supposed benefit for small business
is the pass-through deduction, costing nearly $736 billion over the
next 10 years. While framed as a small business tax cut, it mostly
delivers six-figure windfalls to the already wealthy and relatively
little to middle-class small business owners. The top 1 percent cap-
tures 55 cents of every dollar under this provision. The only rig-
orous academic research on the pass-through deduction found no
measurable increases in investment, employment, or wages. It is
another example of failed trickle-down economics.
It gets worse. To help pay for those tax cuts for the rich, Repub-
licans cut Medicaid, stripping 7.8 million people of health insur-
ance. On top of that, they refuse to extend the Enhanced Premium
Tax Credits, resulting in an average premium increase of $1,500
for over 4 million small business owners. For most middle-class
small business owners, that premium increase alone wipes out the
entire benefit of the pass-through deduction.
Then, they cut $187 billion from SNAP, taking food assistance
from 4 million people in a typical month. These are the customers
that small grocers, farmers markets, and local food businesses de-
pend on. Tax cuts don’t mean a thing if your customers disappear.
It gets worse. While Congress was passing this bill, the President
was unilaterally imposing the largest middle-class tax hike in a
generation. According to new analysis, the average small business
importer paid $306,000.00 more in tariffs over the past year than
the year before.
Large corporations can absorb tariff volatility. They have supply
chain teams, capital reserves, and Washington lobbyists that can
score them exemptions. But the restaurant owner, the small manu-
facturer, the retailer with one supplier must absorb it directly in
the margins and by raising prices on their customers. Most of these
tariffs were ruled unconstitutional, but the refunds small busi-
nesses are owed have yet to be paid.
But wait. It gets even worse. Trump’s illegal war in Iran has
sent energy costs soaring, from the gas prices that fuel our com-
mute, to the diesel prices that move every product in our economy,
to the fertilizer prices that determine the cost of our food. Multiple
analysts are warning of a global recession.
Small business owners cannot plan, hire, or invest in this envi-
ronment. The higher tax refunds that families are receiving will be
swallowed whole by higher gas prices, redirecting the so-called
Working Families Tax Cut directly to Big Oil.
While there are many provisions Democrats have supported in
the past, like bonus depreciation and expensing for R&D, we could
not support this abomination in its totality.
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The One Big Beautiful Bill adds over $4 trillion to the national
debt while transferring wealth from working families to million-
aires and billionaires. Whatever relief people did get has been
upset by tariffs, by healthcare, by gas, and by the growing cost of
living crisis that Republicans have refused to address.
Republicans called this hearing to celebrate their sole accom-
plishment, but small businesses are not celebrating today. They are
surviving, barely.
I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now want to introduce our witnesses.
Our first witness today is Mr. Garrett Watson. Mr. Watson is the
director of Policy Analysis at the Tax Foundation. He is an expert
in federal and state tax policy, and his work has been featured in
The Washington Post, The Atlantic, Politico, and other major out-
lets. Mr. Watson previously worked as a senior program manager
at a think tank where he conducted policy research on economic op-
portunity and labor markets. He earned a bachelor of arts degree
in economics and philosophy from St. Lawrence University and is
a leadership network member at the American Enterprise Insti-
tute.
Want to thank you for being here today very much. Look forward
to our discussion.
Our next witness is Ms. Traci Tapani. Ms. Tapani is a co-owner
of Wyoming Machine, a manufacturing company based in Stacy,
Minnesota. She has spent more than three decades leading oper-
ations across sales, engineering, production and quality in the man-
ufacturing sector. Ms. Tapani currently serves on the Small Busi-
ness Policy Council for the U.S. Chamber of Commerce, is a Mem-
ber of the Fabricators and Manufacturers Association, and is a
Board Member at the Women in Manufacturing Association. She
earned a bachelor of science in business from the University of
Minnesota and has been recognized by the Manufacturing Institute
with the STEP Ahead Award.
Appreciate you being here today and look forward to our discus-
sion.
Our next witness today is Becky Renfro Borbolla, who is my good
friend, as her family is, from the great State of Texas. Ms. Renfro
Borbolla is the senior vice president of Renfro Foods, a family-
owned manufacturing company in Fort Worth, Texas. A third-gen-
eration leader, she has played a key role in expanding the com-
pany’s distribution across the U.S. and international markets while
leading operations, logistics, and export sales to grow the brand’s
global presence. Ms. Renfro Borbolla has received numerous hon-
ors, including induction in the Specialty Food Association Hall of
Fame and the 2016 Businesswoman of the Year Award from the
Fort Worth Hispanic Chamber of Commerce. She has earned a as-
sociate of arts degree from Tarrant County College and a bachelor
of science from LeTourneau University.
And I look forward to hearing your words today, and say hello
to your family.
I now recognize the Ranking Member, Ms. Velázquez, to briefly
introduce our last witness appearing before us today.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
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Our final witness today is Michael Negron, senior fellow for eco-
nomic opportunity at the Center for American Progress, with a
focus on economic development, consumer protection, and small
business policy. Prior to joining American Progress, Negron served
as a special assistant to the President for economic policy in the
Biden-Harris administration, where he worked with several federal
agencies to develop, coordinate, and implement small business pol-
icy, consumer protection initiatives, and other policy areas. A
former U.S. naval officer, he also served in the White House Office
of Management and Budget and the U.S. Department of Defense.
He earned a J.D. from Harvard Law School, a master’s from the
University of Memphis, and a bachelor’s in foreign service from
Georgetown.
Thank you, Mr. Negron, for being here today. Welcome.
Chairman WILLIAMS. The gentlelady yields back.
And again, we want to thank all of you and appreciate all of you
being here today.
Before I recognize the witnesses, we got some rules we got to ad-
here to. And I would like to remind all of you that your oral testi-
mony is restricted to 5 minutes in length. If you see the light in
front of you turn red in front of you, it means your 5 minutes is
concluded, and you need to shut it down and you should wrap up
your testimony. If you continue to go, you will hear this to remind
you your time is up, okay?
So with that in mind, I now recognize Mr. Watson for his 5-
minute opening remarks.
STATEMENTS OF MR. GARRETT WATSON, DIRECTOR OF POL-
ICY ANALYSIS, TAX FOUNDATION; MS. TRACI TAPANI, CO-
PRESIDENT AND OWNER, WYOMING MACHINE, INC.; MS.
BECKY RENFRO BORBOLLA, SENIOR VICE PRESIDENT,
RENFRO FOODS, INC.; AND MR. MICHAEL NEGRON, SENIOR
FELLOW FOR ECONOMIC OPPORTUNITY, CENTER FOR
AMERICAN PROGRESS
STATEMENT OF GARRETT WATSON
Mr. WATSON. Chairman Williams, Ranking Member Velázquez,
and Members of the Committee, thank you for the opportunity to
testify today on the impact of the 2025 reconciliation law on small
businesses and opportunities for future reform.
The 2025 law delivered important improvements by making per-
manent key provisions from the 2017 Tax Cuts and Jobs Act. This
provided much needed certainty for small business owners and
making long-term decisions about investment, hiring, and expan-
sion. Notably, the law made permanent the Section 199A deduction
and the lower individual tax rates that apply to small pass-through
businesses which comprise most small businesses in the United
States.
The law also strengthened incentives for investment by restoring
full expensing for short-lived assets like equipment and expensing
for domestic research and development.
These provisions reduce the tax penalty on investment by allow-
ing businesses to deduct costs immediately rather than over time.
As a result, they support higher levels of capital investment, pro-
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ductivity and wages, and are expected to contribute meaningfully
to long-run economic growth. Tax Foundation estimates that per-
manence for 100 percent bonus depreciation and R&D expensing
will increase long-run economic output by about 0.7 percent and
create about 180,000 full-time jobs.
However, despite these improvements, the Tax Code does remain
overly complex and costly to navigate for smaller firms. Small busi-
ness owners must devote significant time and resources to compli-
ance, resources that could otherwise be used to grow their oper-
ations. Provisions like Section 199A, while beneficial, are also
among the most complex in the Tax Code, particularly for higher
income filers who must navigate detailed wage and capital limita-
tions.
There are clear opportunities for further reform. Policymakers
should prioritize simplifying the existing provisions, expanding full
expensing to a broader range of investments, including all struc-
tures, and improving the treatment of business losses. Many small
businesses face delays in realizing the full value of deductions be-
cause losses must be carried forward, reducing the real value over
time due to inflation and the time value of money.
In addition, broader policy uncertainty continues to weigh on
small businesses in 2026. Recent tariffs, for example, increase
input costs for firms, and they rely on imported goods that can re-
duce their ability to invest, hire, and grow. Even when tax policy
moves in a positive direction, uncertainty in other areas can offset
those gains and lead businesses to delay or scale back their plans,
as we have seen over the past year.
Looking ahead, policymakers should focus on creating a more
stable, predictable, and neutral tax environment that includes sim-
plifying the Tax Code, ensuring consistent treatment across dif-
ferent types of investments and across different sizes of firms, and
reducing barriers to claiming incentives, like research and develop-
ment credits, which small businesses often underutilize due to ad-
ministrative complexity compared to larger firms.
Ultimately, a simpler and more stable tax system would allow
small business owners to spend less time navigating compliance
and more time doing what they do best: innovating, investing, and
creating jobs for our communities.
The 2025 reconciliation law was an important step forward, but
more can be done to reduce complexity, expand those investment
incentives, and provide certainty for small businesses that are
needed to grow and succeed.
Thank you, and I look forward to your questions.
Chairman WILLIAMS. The gentleman yields back.
And before I go to our next witness, I want to clarify something.
You don’t see a lot of our colleagues here right now. People are
going to come and go today. You haven’t made anybody mad, but
they—we have other hearings, and so they will come and go as we
continue this hearing.
So with that in mind, I now recognize Ms. Tapani for her 5-
minute opening remarks.
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STATEMENT OF TRACI TAPANI
Ms. TAPANI. Thank you, Chairman Williams, Ranking Member
Velázquez, and Members of the Committee, for the opportunity to
testify today. My name is Tracy Tapani, and I am co-president and
owner of Wyoming Machine, a manufacturing company in Stacy,
Minnesota. My family-owned company specializes in sheet metal
fabrication, and we offer a variety of services to clients, from laser
cutting to welding. I also serve on the Board of Directors for the
U.S. Chamber of Commerce, and I am the incoming chair of the
Chamber’s Small Business Policy Council.
The U.S. Chamber serves and supports more than 5 million
small businesses through membership, a nationwide federation,
and digital platforms, giving small business representation re-
sources and a powerful voice at national scale.
Anyone who has operated a business knows that long-term in-
vestment requires certainty. On this tax day, small businesses like
mine are already benefiting from the certainty provided by the
Working Families Tax Cuts, which strengthen cash flow, enhance
predictability, and empower main street to plan for growth. The
Working Families Tax Cuts also support workforce training and
helps hardworking Americans keep more of their wages. Today, I
will highlight how these policies are helping small businesses in
sectors like manufacturing.
First, tax policy that provides permanency and immediate ex-
pensing reduces risk and unlocks investment. Manufacturing is
capital-intensive. When we invest in equipment, we are not buying
nice-to-have items. We are buying capability to compete and to
keep production here at home.
Nearly all U.S. manufacturing firms are small businesses. Be-
cause these firms are capital-intensive, full and immediate expens-
ing directly enables investment and equipment that drives produc-
tivity, stable jobs, and U.S. manufacturing competitiveness. Specifi-
cally, the 100 percent bonus depreciation for new equipment con-
tained in the tax law is hugely helpful.
Before this reform, smaller manufacturers could only deduct 40
percent of the cost of major technology purchases in the first year
and 20 percent in the second, meaning we had to carry more of
that cost for longer. The new rules allow full deduction upfront,
giving a business like mine the ability to invest and advance manu-
facturing technology, like handheld laser welding and other produc-
tivity tools.
In 2025, our welding department was running about 5 weeks be-
hind schedule for months. The kind of backlog puts a small manu-
facturer in a tough position. When you can’t deliver on time, cus-
tomers have to look elsewhere, including overseas. I struggled to
find skilled TIG welders we needed to keep up with this demand.
Fiber laser welding lets less experienced operator do the work that
normally requires a top-tier TIG welder. That is why investing in
fiber laser welding became urgent for us, so we could clear the
backlog, meet delivery dates, and keep customers from sourcing
elsewhere. Full expensing and the certainty that it will remain in
place helped us make that investment faster before delays turned
into lost customers.
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Just as important as equipment is the workforce needed to run
it. The workforce training and short-term Pell that will begin this
summer under the Working Families Tax Cuts have also had a
positive impact on small businesses like mine. While we eagerly
await that funding option, I have confidence it will help lead more
Americans directly into the workforce, filling in-demand jobs like
welding.
I have this confidence thanks to partnerships like the one we
have established with Pine Technical and Community College in
Pine City, Minnesota. We currently partner with students in short-
term programs by providing internships and part-time jobs that
add real-world experience to their classroom training. Even before
short-term Pell is available, I currently have a student working at
Wyoming Machine who is enrolled in short-term training, and she
is already contributing on the shop floor, using our handheld laser
welding technology.
For small manufacturers, short-term Pell can accelerate the pipe-
line into welding and machining jobs by helping students afford
short programs and by strengthening employer-connected work-
based learning.
Congress also made a commonsense decision to remove taxes on
overtime. In my metal fabrication business, overtime happens
when we are responding to customer demand on short notice. For
example, when a customer lands an unexpected sale of equipment
and needs a rush order fulfilled, our team may put in extra hours
to meet that demand, and they should be able to keep more of their
hard-earned money for stepping up. When my employees can keep
more of that hard-earned money in terms of wages, they are more
inclined to continue stepping up, ultimately leading to a happier
and stronger workforce.
Thank you again for the opportunity to testify. The Working
Families Tax Cuts are enabling small businesses to do what we do
best: build, innovate, and create jobs.
I look forward to answering your questions.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Ms. Renfro Borbolla for her 5-minute opening re-
marks.
STATEMENT OF BECKY RENFRO BORBOLLA
Ms. RENFRO BORBOLLA. Good morning, Chairman Williams,
Ranking Member Velázquez, and Members of the Committee. My
name is Becky Renfro Borbolla of Fort Worth, Texas, and I am the
senior vice president of Renfro Foods, a third-generation family
business that produces Mrs. Renfro’s salsa, sauces, and relishes.
Mrs. Renfro’s was started by my grandparents shortly after the
Great Depression when my grandmother and grandfather,
Arthurine and George Renfro, began creating delicious spices and
vinegars in their home on Gould Avenue in Fort Worth. ‘‘Mam-
Maw’’ Renfro preferred to be called ‘‘Mrs. Renfro,’’ so it was a nat-
ural that their products, which soon expanded to syrups and the
southern relish commonly known as ‘‘chow-chow,’’ were named in
her honor.
During the 1960s, my grandparents sold Mrs. Renfro’s products
at fruit and vegetable stands in Fort Worth, and eventually ex-
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panded our product line to include hot sauces and picante sauces.
This is when our family’s business truly began to become the brand
that it is today.
Before long, my grandparents’ company outgrew their home, and
they purchased a building nearby on Stella Street, where our com-
pany is still headquartered today. Mrs. Renfro’s products are now
sold in supermarkets, gourmet food stores, and gift shops in all 50
States and in more than 30 countries worldwide.
Family has always been central to Renfro Foods.
We just recently lost my uncle. Sorry.
Okay. So my father, Bill, and his siblings, Jack and Linda, spent
much of their childhood at the building on Stella Street. As adults,
they joined the company devoting their time to growing Renfro
Foods. Dad was the company’s longtime CEO leading corporate
strategy functions at the business—sorry—and his brother Jack
was the COO handling the manufacturing.
Today, my cousin Doug, my brother James, and I are the third-
generation management of our family’s company. Through it all, we
have remained a small family company in the same building in
that fast growing Texas city known as ‘‘where the West begins.’’ We
have made it because we stayed true to the things Mam-Maw and
Paw-Paw Renfro cared about from the beginning: True to family,
true to flavor.
This passage of the Working Families Tax Cuts in July of last
year was critical for businesses like ours, family-owned small busi-
nesses whose products can be found around the world yet remain
deeply rooted in our local communities. What began as a modest
enterprise has, over generations of hard work and reinvestment,
become the foundation of our family’s livelihood, past, present, and
future.
The certainty provided by permanently extending key provisions
of the Tax Cuts and Jobs Act that supports small businesses has
helped ensure that this work can continue into the next generation.
As others on the panel will discuss today, the permanency of pro-
visions like the 20 percent small business deduction under Section
199A, along with policies that support growth and investment, such
as full bonus depreciation, helps businesses like ours to continue to
compete with much larger companies operating in the same market
space. Small businesses are grateful that Congress acted to prevent
a massive tax increase and to provide the stability necessary to
plan, invest, and hire without the uncertainty of temporary tax
policies.
For family-owned businesses, the increase in permanence of the
estate and gift tax exemption was especially meaningful. It pro-
vided long overdue certainty and allows families like mine to focus
on long-term planning, reinvestment, and succession, rather than
costly estate planning to prepare for a sudden tax change that can
disrupt decades of work. That stability has been invaluable.
As Congress considers ways to continue strengthening this sup-
port, there are opportunities to build on that success. Ideally, elimi-
nating the estate tax, often called the death tax, altogether would
be the most complete solution to allow family-owned businesses to
grow, reinvest, and transition across generations without disrup-
tion.
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I appreciate the Committee’s consideration of these issues and
the opportunity to share my family’s experience today. I look for-
ward to any questions you may have. Thank you.
Chairman WILLIAMS. The gentlelady yields back.
On a personal note, you did very good under tough cir-
cumstances.
Ms. RENFRO BORBOLLA. Thank you. I fly home tomorrow for
his services. Sorry.
Chairman WILLIAMS. I now recognize Mr. Negron for his 5-
minute opening remarks.
STATEMENT OF MICHAEL NEGRON
Mr. NEGRON. Thank you.
Thank you to Chairman Williams, Ranking Member Velázquez,
and Members of the Committee, for the opportunity to address you
today. I also appreciate being on a panel with small business own-
ers and Garrett and hearing their stories.
First, just a little bit about my background. I have been fortu-
nate to have small business owners throughout my direct and ex-
tended family. My father-in-law had a successful chiropractic prac-
tice in northern Michigan for decades before he retired to work now
as a real estate agent in Florida. His brothers and sisters all own
or owned small businesses—in some cases, multiple businesses—in
northern Michigan. Decades ago, my mother and her sisters unsuc-
cessfully tried their hand at opening a small Guatemalan res-
taurant underneath an ‘‘L’’ stop in Chicago, and my sister is a
small landlord in Providence.
I have also been able to work on policies to try and help small
businesses at every level of government: state, federal, local. As
policy director to Chicago mayor Rahm Emanuel, some of our first
actions in office in 2011 focused on small businesses. We elimi-
nated 70 percent of business licenses to reduce red tape. We elimi-
nated a decades-old per-employee head tax that was charged to
businesses that the current mayor has tried to bring back. At the
state and the federal level during the pandemic, I was able to work
on emergency relief programs to help keep small business doors
open.
I am here to talk about what the One Big Beautiful Bill Act and
the broader Trump agenda has meant for small businesses. The re-
ality is that the benefits of this bill, while there are good stories
here and there, have flowed to a minority of small businesses, pri-
marily wealthier and larger businesses, while most are facing high-
er costs due to his broader agenda: tariffs, the war in Iran, cuts to
healthcare and other programs.
Under the administration’s broad imposition of tariffs on prod-
ucts coming in from virtually every country, the typical household
is paying about $1,700 more in tariffs over the course of the first
year of the administration. All Americans are facing these higher
costs, but small businesses in particular are hit hard.
I recently released an analysis with some colleagues at the Cen-
ter for American Progress that found that your typical small busi-
ness importer—there are about 236,000 of them—saw their tariff
costs triple, with an average monthly increase of $25,000 a month,
due to these tariffs. Overall, these small business importers paid
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$306,000 more in tariffs from March of 2025 to February of 2026
compared to the previous year.
Another major area of heightened costs for Americans and small
businesses is healthcare. Healthcare premiums doubled on average
amongst the 20 million Americans—the more than 20 million
Americans with subsidized marketplace coverage due to the expira-
tion of their Affordable Care Act Enhanced Premium Tax Credits.
About half of those affected individuals are either small business
owners, self-employed individuals, or employees at businesses with
fewer than 25 employees.
Small businesses are also facing huge spikes in gas and diesel
costs due to the war in Iran. Gas prices are up 40 percent. Diesel
prices are up more than 50 percent. And we have seen FedEx,
UPS, Amazon, and the U.S. Postal Service all announce higher fuel
surcharges or other shipping costs, citing the spike in fuel costs.
In the past week, we have seen indicators of consumer and busi-
ness inflation come in hot with year-over-year increases in the Con-
sumer Price Index of 3.3 percent and in the Producer Price Index
of 4 percent.
And then on the other side of the ledger, the tax benefits of the
One Big Beautiful Bill Act have flowed to a smaller, wealthier sub-
set of businesses. And the tax cuts themselves, the refunds that
people are receiving, have failed to live up to the expectations that
were set by this White House.
As noted, the One Big Beautiful Bill Act made permanent the
qualified business income deduction. And since its creation in 2017,
this deduction has primarily benefited wealthier business owners.
Half of the benefits of the 199A deduction to date have gone to mil-
lionaires, and two-thirds have gone to people earning more than
$500,000 a year.
So when reviewed in the full context, I believe the story of the
One Big Beautiful Bill Act is that the benefits it offers in the form
of reduced taxes are mostly enjoyed by wealthier Americans and
businesses. The relatively fewer benefits it has offered to everyone
else are right now being outweighed by higher costs due to tariffs,
due to cuts, and due to the impact of the war in Iran. This is not
a legacy to celebrate today.
Thank you for the opportunity to speak today, and I look forward
to the discussion and any questions.
Chairman WILLIAMS. The gentleman yields back.
We will now move to Member questions under the 5-minute rule
that we discussed earlier. I recognize myself for 5 minutes.
Ms. Renfro Borbolla, the Working Families Tax Cuts were de-
signed to ease the financial burden on families and small busi-
nesses, helping them invest in their employees, expand operations,
and plan for the future. So my question would be, could you ex-
plain how the estate tax provisions affect your long-term business
planning, and specifically, do these provisions make it easier to en-
sure the continuity of your business?
Ms. RENFRO BORBOLLA. So I would love to see, as I call it,
the death tax go away and capital gains go away. We want to—
you know, I pay taxes. My grandmother paid taxes. Our company
paid taxes. And then grandma passes away. We have to pay taxes
on the taxes that we have already paid. And a lot of companies
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have to sell the farm, have to sell the company or a portion of the
company to be able to pay those taxes. And that is horrible that
generational companies and farms are having to be sold to pay
taxes on taxes that they have already been paid.
Chairman WILLIAMS. All right. Thank you for that.
And, Mr. Watson, congressional Republicans ensure that the
Working Families Tax Cuts includes provisions to improve small
businesses’ cash flow and access to incentives. My question is, can
you walk us through how these provisions reduce barriers for small
businesses trying to invest and trying to grow?
Mr. WATSON. For sure. So the 2025 reconciliation law provided
for permanence for 100 percent bonus depreciation for short-lived
assets, so they can immediately and fully deduct the costs of those
investments. And that is particularly important for small busi-
nesses just because they often don’t have the cash flow or the mar-
gins necessary to wait to take those deductions in future years.
Large firms, big corporations have the liquidity on hand to go
ahead and wait there, but for small businesses, it can make a very
big difference.
It is especially true for domestic R&D expensing, which is some-
thing else that was made permanent in the law. And one thing
that was also important was that permanence part because it sets
aside that uncertainty. Folks don’t have to worry about changes in
the underlying law or uncertainty about what will happen in Con-
gress, which was a game changer for folks. And we find that that
is the biggest bang for their buck, meaning benefits economic
growth for the revenue that you lose comes from expensing for
R&D and for those investments.
Chairman WILLIAMS. Thank you.
Ms. Tapani, as you know, the Working Families Tax Cuts Act ex-
tended and made permanent the 100 percent bonus depreciation,
which we have all been talking about this morning, while also add-
ing a new provision of no tax on overtime. So could you describe
how these specific elements of the Working Families Tax Cuts have
benefited your business and your employees?
Ms. TAPANI. Certainly. The only way that U.S. manufacturers
can remain competitive in this global economy is to invest in equip-
ment. We need people, we need equipment, and raw materials to
be successful. And if you are not constantly investing in equipment,
you cannot meet the needs of your customers. I mean, I am dealing
with enormous manufacturers in the State of Minnesota and
throughout the country that have ever-increasing demands and
needs, so to be able to invest in that equipment is really helpful.
It is also helping us close the skills gap, which I think is important.
When we can’t deduct the cost of that equipment right away, I
might as well get out a crystal ball and try to predict what is going
to happen in the future. Manufacturing has been in contraction, in
and out of contraction, for the past several years, and my crystal
ball doesn’t show me when that is going to come to an end. So
being able to make a decision today to buy something and expense
it is everything to my business. It is serving my community and
my customers.
As far as my employees go, when they have to work overtime to
help us get a project done that has come in unexpectedly for a cus-
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tomer, they might have to leave their children in daycare for
longer. They might have additional expenses. Everybody knows
people are experiencing higher grocery costs and some other costs.
The more of that hard-earned money that they can keep is impor-
tant to them. Their happiness and their ability to pay for their ev-
eryday needs—their childcare, their healthcare, whatever that
might be—matters to me. So I am thankful that they can keep
more of their overtime pay.
Chairman WILLIAMS. Thank you. The gentlelady yields back.
Well, with the time we have left, I want to say one thing about
the inheritance tax. One of the things—and with your help—with
your help, Ms. Renfro, we were able to take it from $11 million per
couple to $30 million—or $15 million to $30 million. So that helps
a lot of people so we don’t lose the family farm. Thank you for your
help on that. I appreciate it.
With that in mind, I now recognize the Ranking Member for 5
minutes of questions.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
Mr. Negron, as the saying goes, the purpose of a system is what
it does, not what it claims to do. We hear a lot of wishful thinking
from our Republican colleagues about what they want the pass-
through deduction to do, from increasing investment to creating
jobs, but rarely do they contend with the actual outcomes.
Mr. Negron, what does the pass-through deduction do?
Mr. NEGRON. Well, on its face, it reduces the tax burden of sole
proprietors, S corps, and partnerships who are now allowed, going
forward, to deduct 23 percent of their qualified business income,
which is essentially their net profits.
What we have seen is, essentially, the more income you have, the
bigger benefit that you get from the deduction. Now, there are in-
come caps in the QBI provision, about $550,000 or so married,
$270,000 joint—or individual. And what we are seeing is that these
benefits are really skewed towards the wealthiest businesses. I
have used some of the numbers—half going to millionaires, two-
thirds going to people who earn more than $500,000, only 6 percent
to businesses that earn less than $150,000. And so the $736 billion
going forward for the next 10 years, it is primarily going to the
wealthiest businesses.
Ms. VELÁZQUEZ. And of the academic research that exists on
the effect of the pass-through deduction, have they found a measur-
able increase in employment, wages, or investment?
Mr. NEGRON. No. As you mentioned, the definitive study on
this from February of 2025 in the Journal of Public Economics
found no benefit to wages, to job creation, or to physical invest-
ment.
Ms. VELÁZQUEZ. About three-quarters of the people who claim
this deduction make less than $200,000 per year; arguably, the
people who are most in need of tax relief. How does the size of
their tax benefit compare to someone who makes millions of dollars
per year?
Mr. NEGRON. Well, just to give you one example, using just
Joint Committee on Taxation analysis, businesses that earn less
than $150,000 were making about $425 on average in tax benefits
through the pass-through deduction compared to hundreds of thou-
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sands in benefits that go to wealthier businesses. And that $425
can get canceled out pretty quickly when you look at tariffs, when
you look at gas prices.
Ms. VELÁZQUEZ. While Republicans were passing a $4 trillion
tax cut for the rich and cutting $1.5 trillion in healthcare and food
assistance for the poor, the President was enacting the largest mid-
dle-class tax hike in a generation through tariffs. How are tariffs
affecting small businesses in particular?
Mr. NEGRON. Well, I would point to a couple of different things.
So first, it is just the costs themselves. You know, what are tariffs?
Tariffs are a tax. Tariffs are a tax that a consumer, a business has
to pay to bring a product in from another country. They pay it at
the port of entry—plain and simple, it is money. But also more red
tape. You have to actually—because the tariff system is more com-
plicated, you are having to track the products that you are bringing
in more carefully, not only to make sure you are paying the right
amount, but to avoid any compliance issues.
And I think the third is just predictability. Right now, if you are
a business, you are a toy store, you are a neighborhood retailer,
you are trying to plan for Christmas. The picture is a little murky.
You have got the 10 percent across the board tariffs that the Presi-
dent put in place following the Supreme Court decision. That
should end in mid to late July. What is coming after that? What
is next?
So it is very hard to plan right now for that future, and that is
just another barrier hanging over the heads of small business own-
ers.
Ms. VELÁZQUEZ. Thank you, Mr. Negron.
Mr. Watson, when it comes to the interaction between the Presi-
dent’s two main economic policies, how does the cost of the tariffs
affect the overall impact of the One Big Beautiful Bill?
Mr. WATSON. So I think Michael got this right in that tariffs
are a tax. And the risk is that that tax, which is going to be passed
onto consumers and American workers, there is a risk that it is
going to offset a big portion of the tax cuts that were delivered last
year, particularly when you look at the distribution of that. Lower
income folks, working class folks, larger portion of their after-tax
income is going to be eaten up by those tariffs. And so that is prob-
ably one major reason that we should be reconsidering that regime.
Ms. VELÁZQUEZ. Thank you. I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Ms. Van Duyne from the great State of Texas for
5 minutes.
Ms. VAN DUYNE. Thank you so much, Mr. Chairman.
And I want to thank all of our witnesses for joining us today. I
am especially excited to have our north Texan here, Ms. Becky
Renfro Borbolla of Renfro Foods, testifying in front of the Com-
mittee today. We just had your Fort Worth Chamber, I just met
with earlier, and they wanted me to give you a hard time, and I
told them I wasn’t going to do that. I asked what questions that
I should ask and they said maybe not.
But this past summer, Republicans passed the Working Families
Tax Cuts, and it was the most consequential tax package in gen-
erations. Today, I am proud to celebrate the several transformative
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small business provisions contained in this landmark legislation
which will deliver real and lasting benefits to small business own-
ers across the nation.
This bill made permanent the 20 percent qualified business in-
come deduction under Section 199A, providing critical long-term re-
lief to millions of pass-through businesses. It restored 100 percent
bonus depreciation and immediate expensing for business invest-
ments and qualified property like machinery, making it much easi-
er for small business owners, not billionaires, to invest in new tech-
nologies and stay competitive. It also reinstated full and immediate
expensing for research and development, allowing, again, small
business entrepreneurs to invest in new ideas, products, and tech-
nologies to fuel the next wave of American innovation.
That being said, I think the most critical and crucial aspect of
the Working Families Tax Cuts is that it made these provisions
permanent. For far too long, small business owners operated under
the cloud of temporary tax relief and impending expirations, and
now they have certainty that they need to effectively plan for the
future. They have told us over and over again they can plan if they
know what the rules are, but when the rules consistently change,
they don’t know how to invest. It is actually said that the previous
tax bill from 2017, because it had a date set to expire, that we
might have missed out on as much as 80—I am sorry—$800 billion
of investments.
So I just have a quick question. How many of you are billionaires
on this panel? How about billionaires in the room? No? But you are
all here to testify on, like, the benefits of this bill, right?
So it is not just like the massive billionaire companies. I think
that is an important thing to note.
This morning, I started off—I had an 8 a.m. roundtable where
we had eight people—eight constituents in Virginia that talked
about how important this small—you know, to small businesses
this Working Families Tax Cut bill is. These are not large compa-
nies. These are not massive corporations. These were small mom-
and-pop shops that it really made a difference to.
Ms. Borbolla, I want to ask you, how beneficial is it for a com-
pany like Renfro Foods to have a solid picture of what the tax envi-
ronment will look like 5, 10, 15 years out?
Ms. RENFRO BORBOLLA. It allows us to pay our employees
more, provide benefits. We have matching 401(k). We pay 100 per-
cent of their healthcare insurance premiums and 50 percent of
their dependents. That is huge. We cannot do that if we don’t know
what the taxes are going to be tomorrow or in 5 years.
Ms. VAN DUYNE. So are you investing more and, like, upgrad-
ing and scaling up in the future growth of your business as a direct
result?
Ms. RENFRO BORBOLLA. Yes, we are. And one of the things
we upgraded that the bonus depreciation helped us was we put in
a line—a new production line that ran—took us from running 100
jars a minute to 200 jars a minute, and then the pandemic hap-
pened. And our sales doubled overnight because people are staying
home and they were buying salsa, chips, pasta sauce, pasta, all the
comfort foods. And allowing us to do that allowed us to stay in
business and fill orders.
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And our employees loved it because they were getting lots of
overtime and they loved all the overtime. And in 2 years, out of 70
employees, we had five cases of COVID in our entire plant.
Ms. VAN DUYNE. That is incredible.
Ms. Tapani, what was the best part of the tax cuts bill for you?
Ms. TAPANI. I would start by saying that leading up to the expi-
ration or potential expiration of many of the things that were in
the 2017 tax bill, it was very stressful for small business owners,
because here we are in 2025 not knowing what could happen at the
end of the year. So we started off, you know, in the end of 2024,
the beginning of 2025, not being able to make a plan for anything
because we don’t know what the tax situation is going to be.
In my particular business, besides the fiberoptic laser welding
that I mentioned, we have made an investment in fiber laser cut-
ting. Representative Stauber is not in the room right now; he came
to my facility to see that. And we were able to use bonus deprecia-
tion on that equipment as well.
Sometimes when you think of people’s equipment—I am a small
business—you might not realize that if I buy a laser cutting ma-
chine, we are talking about 500 thousand to a million dollars of an
investment for me. I am putting my company at risk. I am putting
my family at risk. I am putting my employees at risk when I make
a decision like that. Being able to deduct immediately makes a
huge difference.
Ms. VAN DUYNE. Great. Thank you very much.
Ms. Borbolla, quick question. Where can we buy your salsa in
D.C.?
Ms. RENFRO BORBOLLA. Okay. Chevy Chase, super-
market——
Ms. VAN DUYNE. There you go.
I yield back. Thank you.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mrs. McIver from the great State of New Jersey
for 5 minutes.
Mrs. MCIVER. Thank you so much, Chairman, and thank you to
the Ranking Member for hosting this hearing today. I want to
thank each witness for being here.
And, Ms. Borbolla, I want to offer my condolences to you and
your family, and praying for you all with the loss of your uncle.
Small businesses are struggling. They didn’t know what they
were doing in 2025, and now in 2026, they still don’t know what
they are doing. Here we are almost a year after Republicans passed
the big ugly bill, and the economy is not stronger. It is on the brink
of collapse. Inflation and gas prices are skyrocketing, job growth
has stopped, wages are declining, and confidence in the economy is
at a record low. The administration’s plans to rob the working class
to give money to the wealthy has raised costs and cut healthcare
and nutrition assistance. Working families and young people are
not feeling relief. They are falling behind. Small businesses depend
on these customers to keep their lights on. When families pull
back, those businesses have to shut their doors.
The reality is simple. The big ugly bill is creating an economy
that only produces profit for the 1 percent.
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Mr. Negron, I want to thank you for your testimony. It was a
MasterClass here. One, because it had a lot of facts, right. A lot
of facts, a lot of numbers, and honestly I might print it and put
it on the front door of my office so people understand exactly what
we are dealing with here.
Inflation on everyday goods is skyrocketing, that you talked
about, and incomes for families—the incomes families rely on to
pay for these are plunging, literally.
How is this combination killing the purchasing power of working
families, and how does that hurt small business? I know you talked
a little bit about it on your testimony, but can you elaborate a little
more about that?
Mr. NEGRON. Yes. First, and if my wife is watching, the fact
that you called anything that I have done a MasterClass, I hope
she is taking that to heart.
So I would say a couple things. First, we have talked about the
fact that people are paying more, so it is a $1,700 per household
just for the first year due to the tariffs, just the fact that small
business importers are paying more. Those costs get spread
around.
But what we are also seeing is due to this war. The price of gas
is up more than 40 percent, the price of diesel up more than 50
percent. The price of jet fuel is up more than 90 percent. The price
of fertilizer is up more than 50 percent. And so you see that first
at the pump, but then it makes its way through everything else:
grocery prices, online purchases, plane tickets, you name it. The
longer this goes on, the more it will filter through the economy.
And so you see these headwinds that are being imposed by these
policies. And on the other side of the ledger, we just—my organiza-
tion just put out a study yesterday showing that the increase in re-
funds under the One Big Beautiful Bill Act is coming in about $650
less on average per taxpayer than what the White House had an-
ticipated. So instead of a thousand dollar bump in refunds, we are
seeing closer to $350.
And so when you line those all up against each other, the costs
of these policies are exceeding the benefits of those tax cuts to the
vast majority of people. And I think that is the economic
headwinds that we are facing.
Mrs. MCIVER. Yes. Thank you for that.
You know, small business bankruptcy surged 67 percent from
last year due to the worsening of the economy. And you talked
about the one big, you know, beautiful bill, and the administration
and policies. How have, you know, they helped or how has this bill
helped create this increase in, you know, small business bank-
ruptcies, you think, in your opinion?
Mr. NEGRON. Well, I would just say that the uncertainty of the
tariff regime, the additional costs, those are likely contributors. I
haven’t seen studies that unpack that increase in bankruptcy, so
I am speculating just on the basis of what we know to be the case
is that people are facing—businesses are facing higher costs due to
the tariff taxes.
Mrs. MCIVER. Yeah. Thank you for that.
With that, I yield back.
Chairman WILLIAMS. The gentlelady yields back.
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I now recognize Mr. Wied from the great State of Wisconsin for
5 minutes.
Mr. WIED. Thank you, Mr. Chairman. And thank you to all of
our witnesses for being here today.
You know, after 4 years of overregulation and over $1 trillion in
increasing compliance costs under the Biden administration, the
Working Families Tax Cuts are a major step forward towards lev-
eling the playing field for America’s small businesses. From the
codification of 199A deductions and the R&D expense deductions,
to the creation of new opportunity zone and no taxes on tips and
overtime, Republicans are committed to helping entrepreneurs
start and grow their businesses.
As a former small business owner, I know firsthand the impor-
tance of many of the pro-small business tax provisions that were
included in the Working Families Tax Cuts. For some businesses,
these deductions can be the difference between growing their small
business and laying people off. We have already seen the benefits
of these tax cuts as in March alone our economy added 178,000
jobs. I look forward to our discussion today about the Working
Families Tax Cuts and how this Committee can improve the impor-
tant part of our nation’s economy, which is main street.
Mr. Watson, one of the most common lies folks on the other side
of the aisle like to tell is that the Working Families Tax Cuts only
benefits the wealthy and the big, big businesses. If we look at one
aspect of the Working Families Tax Cuts, which is the 199A, a re-
port from the bipartisan Congressional Research Service found that
80 percent of the 199A claims were filled by those making less than
$200,000 in a year.
How important are 199A deductions for the smallest of America’s
small businesses?
Mr. WATSON. Part of the motivation for 199A, of course, was,
in 2017, we reduced the headline corporate tax rate from 35 per-
cent to 21 percent, and it was really important that we had some
degree of parity between those larger corporations and smaller
firms so that they didn’t think about the type of business that they
need to be to get the tax cut. And the 20 percent deduction helped
create that parity and simplified that difference. And as you said,
a lot of small businesses do claim that deduction when they have
net income. Also, when you look at the weight of economic activity,
a lot of, you know, big firms who hire a lot of folks who earn a lot
of income are getting a lot of that benefit. That is because they are
contributing to the economy. So that is what we would expect
under a progressive tax system.
Mr. WIED. Ms. Tapani, manufacturing employs almost a quarter
of working-age people in our district, in Wisconsin’s Eighth Con-
gressional District, with over 90 percent of the manufacturers are
small businesses. How have the Working Families Tax Cuts al-
lowed you to reinvest your tax savings into your manufacturing
business?
Ms. TAPANI. I think in a number—sorry. I don’t know how to
use a microphone apparently.
You know, I have already talked about investments in equip-
ment. I know that I have heard a number of people mention that
people’s wages are not increasing. At Wyoming Machine, that is not
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true. Ever since we came out of the COVID pandemic, people’s
wages have been steadily rising. April is the month in which my
employees, all of them, will receive a pay change. They will be re-
ceiving it this year. They received a bonus at the end of last year.
Even people that were temporary employees that were working for
me received a bonus even though they are not actually employees
of Wyoming Machine at this point in time.
So we are investing in people. We are investing in equipment.
We are using some of the money that we have available to us to
employ people with disabilities in our community, working with or-
ganizations like RISE who employs people that need extra assist-
ance in the workplace. We are working with our high schools and
our technical colleges to provide internships and part-time jobs for
people so that they can earn necessary—or learn the necessary
skills that they need to move on.
So I don’t agree with this idea that we are not investing back in
our business. I know a lot of small business owners. Some of them
are my customers, some of them are my suppliers, some are my col-
leagues on the Small Business Policy Council, and I have yet to
hear someone who doesn’t have a story about how they have in-
vested back in their business, in their employees, and in their com-
munities.
Mr. WIED. Thank you.
Ms. Borbolla, a family-owned business like yours takes a long-
term view and must balance responsibility with sustainability for
employees and the next generation of business owners. So from
your perspective, how has the Working Families Tax Cuts helped
you invest in employees in the long-term stability of your business?
Ms. RENFRO BORBOLLA. The same as Ms. Tapani. We have
given a pay raise every year. We gave bonuses at the end of De-
cember. And we have generational workers. We have mom and son
and grandson working for us. So we are—the management side is
multigenerational, but also our employees are multigenerational.
They tell their son and daughters and grandchildren, You need to
go to work for the Renfros. And we want to keep them, so we pay
higher wages so that they don’t leave us. And we have had a few
leave and find out the grass is not greener on the other side and
they come back.
Mr. WIED. Thank you all very much. I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Simon from the great State of California for
5 minutes.
Ms. SIMON. Thank you.
Thank you, Chair Williams and Ranking Member Velázquez, for
holding this hearing. And I really want to thank our panel today.
And, ma’am, thank you so much for talking about workers with
disabilities and working with RISE. They are a fantastic organiza-
tion. And it is small business owners like you who are really, really
living this idea of inclusivity. As a person with disabilities and who
has advocated for workers with disabilities, there are far few folks
like yourself. So thank you so much.
I would like to align myself with my colleagues’ concerns about
the negative impacts felt by small businesses in this last year and
a half. And, you know, I want to actually frame my comments to
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focus on the systemic implications of H.R. 1: the indiscriminate tar-
iffs, cuts to Medicaid and SNAP, and increasing cost of living of
many of the employees that we have talked about today. Rent is
higher. Groceries are higher. Gas is ridiculous. Folks, not just busi-
ness owners but workers, are feeling squeezed to a point of no re-
turn.
A specific example point that I would like to discuss is the ACA
tax credits which expired in December of last year. So consider a
story of a small family business in my district, an architectural
firm, founded as a first-generation small business, and it has been
operating successfully for 20 years. They are a micro-business, less
than 10 employees. But they weathered the storm of 2008 and
weathered the storm of COVID and continued to move forward
until—until—because of the lapse in healthcare subsidies used to
offset tax breaks for the wealthy in H.R. 1, their own health insur-
ance for their lovely and amazing and hardworking employees,
their premiums increased by 245 percent. 245 percent. Premiums
increased from $765 a month to $1,800 a month per employee. This
is an increase of more than $13,000 a year per employee for bare-
bone health coverage.
The increase has wiped out the discretionary income and has
devastated the small business’ ability to grow and to hire, much
less give raises. The business recently brought in a new employee,
a new mom, whose expertise they need to expand the firm. But this
year they could not offer her health benefits.
So I have a lot more written here, but I am just going to go
straight to my question for Mr. Negron. The Center for American
Progress—and again, thank you for your testimony today—esti-
mates that over 5 million small businesses get their health insur-
ance from the Exchange. Five million small businesses in this
country get their health insurance from the Exchange, and 4.4 mil-
lion saw an average premium increase of over $1,500 per month.
Now, how does this cost compare to any benefit many small mid-
dle-class businesses get through the deduction?
Mr. NEGRON. So just one basis of comparison, looking at busi-
ness owners with less than $150,000 in income, according to the
Joint Committee on Taxation, that subset of businesses—middle-in-
come, mom-and-pops—saw a benefit of $425 on average from the
199A deduction, $4.5 billion in total in relief for that group of busi-
nesses.
On the other side of the ledger, those businesses will pay about
$5.8 billion more due to the expiration of the Enhanced Premium
Tax Credits. That is about $540 more per business. And so you see
just right there they are out about $120 just on the basis of that
loss of Enhanced Premium Tax Credits.
And then just to repeat a point I had made earlier, you also have
millions of employees of small businesses of less than 25 employees
who benefit from this, and that means less certainty for those em-
ployers in terms of attracting top talent, right. If you can’t offer
that benefit because you are too small, if the government is doing
it through these policies, it makes it easier to compete for workers
with bigger businesses who can usually offer better packages of
benefits.
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Ms. SIMON. And wouldn’t you agree that some of these small
businesses who are no longer able to provide healthcare, that their
employees are more likely to be sick, their pregnant employees are
more likely to have maternal health issues, disabled employees are
less likely to get the—not only the medication, but the supports
they need to be able to not only be good workers but good parents
and good citizens?
Mr. NEGRON. Yes. I think a loss in coverage or more coverage
costs can result in higher absenteeism at work, missing days be-
cause of being sick, being less productive at work, just being less
happy, and that is not good for the business.
Ms. SIMON. Thank you all for being here today. We really ap-
preciate your testimony. Thank you, sir.
I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Bresnahan from the great State of Pennsyl-
vania for 5 minutes.
Mr. BRESNAHAN. Thank you, Mr. Chairman, and thank you to
our witnesses for being here today.
The Working Family Tax Cuts Act is a strong step towards mak-
ing sure our economy is built to grow and built to last. During the
2026 tax year, 45 percent of all filers have claimed at least one new
tax cut. That is real relief, and it means more money staying in the
pockets of hard working Americans. On top of providing much
needed relief for American families, it delivers pro-growth policies
that benefit the small businesses that power our local economies.
Over the past few weeks, I met with business owners across
northeastern Pennsylvania, from mom-and-pop diners in Luzerne
to a drilling tool manufacturer in Jessup and everything else in be-
tween, and they all told me the same thing: predictability and sta-
bility matters. When you make key provisions permanent, like the
23 percent pass-through deduction for small businesses restoring
100 percent expensing and the doubling of Section 179 small busi-
ness expensing to $2.5 million, businesses can finally plan ahead
with confidence knowing where the goalposts are.
My first question will be for Ms. Tapani. You spoke about how
important overtime pay is for your employees. What are you hear-
ing from your workers about keeping more of that income this sea-
son and putting it back into your pockets—as well as just a little
public service announcement, today is April 15 and it is tax day.
I was able to finalize mine just this morning. But to that, what
does that mean to your employees and their ability to retain those
hard dollars?
Ms. TAPANI. Being able to return—or retain more of what they
earn in overtime pay matters to them. When an employee has to
work overtime, as I have already said, they are giving up some-
thing. They are giving up time with their family, they are giving
up an opportunity to attend a sports event, they might be paying
more in daycare. So keeping more of that money does matter to
them. I have had some employees mention that they are more like-
ly to volunteer to do overtime when it is needed. No employer
wants to have to mandate that employees work overtime in order
to get a job done or fulfill our customer requirements, so their will-
ingness to be voluntary about it is super important.
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I heard one of my employees tell me that his wife also works in
manufacturing and she has worked a lot of overtime this year.
They saved hundreds of dollars on their taxes this year because of
that provision, and it really mattered to them.
Mr. BRESNAHAN. Thank you for that.
And I am going to pivot to Ms. Borbolla. Ms. Borbolla, did I pro-
nounce that correctly?
Ms. RENFRO BORBOLLA. Yes, you did.
Mr. BRESNAHAN. Okay. Bresnahan, so I empathize.
But someone who comes from a multigeneration family business,
I know how the uncertainty of the Tax Code, and again, knowing
how important it is where those goalposts are so you can make
adequate planning for your family business. How has the added
stability around the estate tax provision in a small business pass-
through deduction changed the way your family is planning for the
future of your company?
Ms. RENFRO BORBOLLA. Well, we definitely know now, be-
cause of the estate tax being increased, that we will not have to
sell some of the business. My uncle just passed away, and so we
will not have to sell some of the business to pay the estate taxes
on his estate.
Mr. BRESNAHAN. I guess something that we had always strug-
gled with was we went from a first-generation family business to
a third-generation family business, and not knowing what the fu-
ture would be for a business, it allowed us to encapsulate a lot of
the unknown. And when you had different provisions set to sunset
out and, you know, making those plans, how easy was it or chal-
lenging was it for you to work with your accountants and, you
know, do you feel that your professional service advisers were ade-
quately informed with leading you through that transition? And I
am sorry to hear about your uncle.
Ms. RENFRO BORBOLLA. Thank you. Yes. Between our estate
planning attorneys and our CPA, they actually both work together
to help us work through making a plan for all the generations. My
grandparents actually started the plan, and it has followed us
through all the years and actually helped us save on paying taxes.
Mr. BRESNAHAN. And how many employees does Renfro Foods
currently have?
Ms. RENFRO BORBOLLA. We have 35 employees and 35 tem-
poraries that work for us right now.
Mr. BRESNAHAN. Well, thank you for providing family sus-
taining careers for those 35 permanent employees and 35 tem-
porary employees.
And with that, Mr. Chairman, I yield the balance of my time.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Tran from the great State of California for
5 minutes.
Mr. TRAN. Thank you so much, Mr. Chairman and the Ranking
Member, for holding today’s hearing.
You know, almost a year ago, congressional Republicans voted to
cut over $1 trillion in Medicaid and Affordable Care Act spending
and $200 billion in nutrition assistance through H.R. 1. Now the
White House is proposing to cut even more. The President’s fiscal
year 2027 budget request, a skinny request that came out 2 months
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late, dedicates nearly 70 percent of proposed spending, $1.5 trillion,
to the Pentagon while cutting investment in health, education,
housing, and small businesses by $300 billion.
I sit on the House Armed Services Committee as well as this
Committee, so I know how important it is that we have a strong
defense budget for our national security, but ensuring that Ameri-
cans have a roof over their head, food on the table, and hospitals
that can treat them is also a matter of national security.
America thrives because of our robust private sector and our
many entrepreneurs, but when the federal government stops in-
vesting in healthcare access, workforce training, community devel-
opment, and potentially entrepreneurs are left struggling instead of
growing, and main street loses customers. Small business owners
can afford this when they are—small business owners cannot afford
this when they are being squeezed by rising healthcare premiums,
tariffs, and skyrocketing fuel prices tied to the Iran war.
Mr. Negron, H.R. 1 pass-through deduction is the primary tax
cut aimed at the wealthiest of businesses. How could it be reformed
to benefit primarily those who need it the most?
Mr. NEGRON. Thank you. So as has been noted a couple times
here, the 10-year cost of the revised 199A is $736 billion over the
next 10 years, which is a lot of money. And a couple ways in which
you could improve upon this, just one example is the Mom and Pop
Tax Relief Act, which is a bill, I think H.R. 3249, which would—
sponsored by Representative Gwen Moore, among others, which
would replace 199A with a bottom-up flat tax deduction of $25,000,
with an income cap of $400,000 for married filing joint and
$200,000 for individual returns. So that is one example of a more
progressive version of this kind of tax deduction that could also re-
duce paperwork for people if it functions essentially as a standard
deduction for your mom-and-pop businesses.
And I imagine it was—I haven’t seen a score of this, but when
two-thirds of the current benefit are going to businesses with over
$500,000, you would think that would save a lot of money that
could go into either deficit reduction or you could be putting it to
other purposes to help small businesses, help working families.
Mr. TRAN. Thank you so much for sharing that. And, Mr.
Negron, even before the war in Iran, inflation had been trending
upward for some time, particularly from places like the Producer
Price Index, which you mentioned. That affects the cost of goods for
businesses. What items are driving this inflation and how are busi-
nesses coping?
Mr. NEGRON. Yes. So the key—sorry. So the key drivers on the
last two Producer Price Indexes were elevated. We had 4 percent
just announced—year over year just released earlier this week.
Last month it came in higher than expected at 3.4 percent, and the
big drivers are energy costs, food costs; in terms of services, trans-
portation and warehousing services are major drivers. And so those
are just added costs that businesses are starting to face. We have
now seen 2 months of it where it has come in hot and it will—those
costs will ultimately make their way to consumers as businesses
have to pass those along.
Mr. TRAN. Let me ask you this. Because of the war of choice by
this administration, oil prices have spiked, driving up gas and die-
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sel prices. Can you discuss how those prices increases affect other
goods?
Mr. NEGRON. Yeah. So first, obviously, people see it at the
pump. Gas prices are up 40 percent, and so that is something peo-
ple see immediately. But diesel prices are up even more, and that
is something that extends into everything. The cost of trucking,
moving a pallet of goods from one part of the country to the other,
diesel affects that, and so you can start to see these costs go into
your grocery—into grocery prices.
Fertilizer is up more than 50 percent. The combination of fer-
tilizer and diesel, more cost for farmers. Another cost you could see
at the grocery store. Shipping costs are going up. As I mentioned
earlier, Amazon, UPS, FedEx, the Postal Service are announcing
increases in shipping costs due to the fuel costs. That is something
that people who are shopping at Amazon or you are shopping on-
line at Walmart, you will start to see that in the cost of goods.
And then jet fuel is up 90 percent, travel is getting more expen-
sive, and so some people will bite the bullet, pay more for their
flights. Others won’t travel at all, and that means reduced business
in tourism if this prolongs for months and months and months.
Mr. TRAN. I appreciate your testimony.
And with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Cisneros of the great State of California for
5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman. Thank you and the
Ranking Member for bringing us together today. I want to thank
our witnesses for being here.
And, Ms. Renfro Borbolla, my sympathies are with your family.
My family just recently lost my father-in-law, so, you know, my
prayers are with you all.
Look, I am in favor of providing working families with tax cuts,
but unfortunately, this Republican-led Congress has not passed any
such bill or no such act. What I remember, you know, is in passing
the One Big Beautiful Bill that does nothing to help—only serves
to help the wealthy and does nothing for working class families.
Rebranding the bill doesn’t change that. It doesn’t change the law,
nor what it does. It insults the intelligence and it is a slap in the
face of the working American people.
I am all in favor of the real tax cuts, as I said, for working fami-
lies and the small businesses that are grinding it out on a day-to-
day basis. Any success they are achieving is, frankly, despite this
administration, not because of it.
I come from a working-class family. My mother was the lunch
lady. My father was a Vietnam vet who worked various jobs. I
know how important a real tax break can be for those living pay-
check to paycheck or small businesses trying to balance their thin
margins. But the law touted by my colleagues across the aisle did
not deliver the economic growth they promised.
In fact, it is hurting working families because of the historic
healthcare cuts that they used to pay for it. They are bearing the
brunt of chaotic taxes in the form of tariffs. They are being forced
to pay 21 percent more for gas. The Consumer Price Index in
March spiked to 3.3 percent year over year. Consumer sentiment
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is at a record low. Small business bankruptcies are up 67 percent.
But President Trump and his family have made almost $4 billion,
and corporate profits hit a record $4.4 trillion.
So, Mr. Negron, who is benefiting more from this tax law, work-
ing families or the wealthy?
Mr. NEGRON. I think the evidence shows that the wealthy are
benefiting more. And to the extent that everyone else is benefiting
in the form of lower taxes, it is being outweighed by far by rising
gas prices, tariffs, and cuts to healthcare and other programs.
Mr. CISNEROS. You just answered my next question right there.
So President Trump—Mr. Negron, President Trump stated this
month that the U.S. Government should not support childcare be-
cause we should prioritize wars instead. I hope my colleagues
across the aisle don’t take that as marching orders, but should the
employer-provided childcare credit cut end, what kind of dev-
astating effect would that have?
Mr. NEGRON. Well, what I would say about what the Presi-
dent’s statement is that budgets are reflections of values, and here
we have a clear statement that we cannot afford things that people
need, healthcare and childcare, that help businesses. We have
heard on this panel today businesses who are benefiting from when
their workers receive good benefits, and so it is in businesses inter-
ests.
And so if you have the President saying that we cannot invest
in those things that help workers and businesses because of a war
that is fundamentally a war of choice, that is a very strong state-
ment about the current direction of the federal government and it
is one that I certainly find concerning.
Mr. CISNEROS. Thank you very much for that.
Mr. Watson, the Tax Foundation found that tariff rates have
changed 50 times in the past year. Can you explain how this kind
of uncertainty affects small businesses’ ability to plan higher and
invest?
Mr. WATSON. For sure. There has been, yeah, a lot of changes
to tariff policy, both in terms of ever changing rates and, of course,
different applications under different sections of the law on which
products are going to be allowed, what exemptions are allowed over
the last 12 months, and that has produced a lot of uncertainty for
businesses. It is one of the top concerns that they have particularly
for businesses that are importing a lot of goods or have complicated
supply chains abroad.
And, of course, looking forward, even with SCOTUS striking
down the IEEPA-based tariffs in February, this latest Section 122
round of tariffs produces more uncertainty because there is uncer-
tainty about what will happen if Congress steps in in July and
what the regime may look like moving forward. So providing that
certainty or eliminating those new tariffs would be helpful for
small businesses.
Mr. CISNEROS. Thank you for that. And, Mr. Watson, policies
like no tax on tips and no tax on overtime sound great to a lot of
people and may deliver some benefit, but the Tax Code is increas-
ingly complex. How do these provisions in H.R. 1 complicate the
tax preparation for small businesses and their employers? I am
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being told employees are having to do this on their own. They are
not getting any benefit from the companies at all.
Mr. WATSON. Two things on that. We did see some simplicity
from keeping the expended standard deduction, but the new deduc-
tions for tips in overtime can be complicated and more guidance
from the IRS will be needed to help iron that out as folks are try-
ing to figure out what they qualify for.
Mr. CISNEROS. Well, thank you all for your time today, and I
yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Alford from the great State of Missouri for
5 minutes.
Mr. ALFORD. Well, thank you, Mr. Chair, and thank you, Rank-
ing Member, for holding this today.
This Committee really exists for one reason, that is to champion
main street and make sure that small businesses have the tools,
the resources they need to do businesses, to start businesses, to be
the fabric of America.
We have seen firsthand now what happens when tax policy gets
right. The Tax Cuts and Jobs Act unleashed one of the strongest
economies in modern history, and the Working Families Tax Cuts
builds on that success by making those pro-growth policies perma-
nent, and permanence matters. Small businesses do not operate on
1-year timelines. They make decisions years in advance about hir-
ing, capital investments, and expansion, and when tax policy is un-
certain, those decisions don’t get made. Those investments don’t get
made.
Working Families Tax Cuts and Jobs Act delivers that certainty,
and with it growth. We are already starting to see that. It
strengthens main street by expanding Section 199A deduction for
pass-through corporations, restoring 100 percent bonus deprecia-
tion, and increase in Section 179 expensing so small businesses can
reinvest in themselves. It supports innovation by allowing full and
immediate expensing of research and development, and it puts
more money in the pockets of working Americans through provi-
sions like no tax on tips and no tax on overtime.
I want to share with you a little story. Two weeks ago, a 76-year-
old man named Melvin, who lives in Benton County in Warsaw,
Missouri, near Lake of the Ozarks, called our office. He was almost
in tears. He said, Congressman, you have got to tell this story to
the American people. I said, What is it? His daughter is a hair styl-
ist. She works a lot on tips. Her husband works a lot of overtime
in his job. They have not gotten a refund in years, and this year
they just opened their mailbox, opened that envelope, and the
check was for $12,000. That is real money, not just for Warsaw,
Missouri, but anywhere in America.
This bill is about more, though, than tax relief. It is about cre-
ating an environment where small businesses compete, plan, and
succeed. Monday, the Small Business administrator, Kelly Loeffler,
came to our district and visited a good friend of mine, Franco
Cupini, who owns a great Italian restaurant in Kansas City. And
he told the administrator firsthand the benefits that it was having
for his business and his employees who were getting large refund
checks, the immediate expensing that he was able to conduct for
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his small business. And I am telling you, Franco Cupini is not a
millionaire and not a billionaire.
I want to know, Mr. Watson, how many small businesses are
classified as an S corp pass-through corporation in America?
Mr. WATSON. The majority of small businesses are pass-through
firms, either being a S corp or a sole proprietorship or a partner-
ship.
Mr. ALFORD. How many of those—I looked it up. There is about
5 million operating as an S corp in America. This comes from your
website. How many of those have a income of greater than half a
million dollars?
Mr. WATSON. I am not sure about the exact amount, but a large
number of them do not have that level of income.
Mr. ALFORD. Right. I looked it up on your website. It is about
3.1 percent.
Mr. WATSON. Uh-huh. Yeah.
Mr. ALFORD. We are talking about a large—millions of compa-
nies, startups, mom-and-pops who have invested their time, their
resources, their blood, sweat and tears, a lot of times, into the
small businesses who now have a shot at success and competing
with the big guys. And yes, are some corporations benefiting from
this tax? Yes, they are. I will admit that.
But you are also seeing some of the largest refunds we have seen
in years. The average this year, the IRS just reported that it is
more than 11 percent up from last year. Some are saying 24 per-
cent by the time everyone gets filed. An average so far of return
of $3,400 dollars in America. That is real money.
And so, yes, Mr. Negron, we are celebrating today. We are cele-
brating the hard work that this Committee, the Republican Con-
ference put in, even though no Democrat voted for the One Big
Beautiful Bill, the Working Families Tax Cut. They all voted to
raise taxes on America. We all voted to reduce and make perma-
nent these deductions so that families can keep their farms, so that
business owners can keep their businesses and thrive in America
and contribute to the fabric of America.
Thank you, Mr. Chairman, and I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Olszewski from the great State of Maryland
for 5 minutes.
Mr. OLSZEWSKI. Thank you, Chairman Williams, Ranking
Member Velázquez, and to our witnesses for being here today.
I am excited to share some facts. Actually, I am disappointed to
share some facts, because they are not that great: today’s conversa-
tion discussing the impacts of the One Big Beautiful Bill, which
President Trump and my Republican colleagues are now desperate
to rename. But that makes sense to me, because so many of my
constituents are the working families this law purports to support,
and they have nothing beautiful to say about this legislation.
Unfortunately, their complaints are validated by the data. The
big ugly bill massively increases our nation’s debt by a whopping
$3.4 trillion. That is $25,000 that will have to be paid back by
every American household.
So, what do we get in exchange? Well, the nonpartisan Congres-
sional Budget Office determined that the combined effects of just
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the President’s tariffs and the not-so-beautiful bill decreases net in-
come for 99 out of 100 American households. Everyone loses, except
literally the top 1 percent, those that make more than $700,000 an-
nually.
By 2027, the poorest American households will lose a net of
$1,650 dollars or 3.4 percent of their income. The middle 20 percent
of earners will see their overall income decrease by $1,300. And the
top 1 percent of those households will receive a net increase in in-
come of nearly $5,000, with the ultra-wealthy doing exponentially
better. I don’t know anyone who would call that a good investment.
There are also real-life impacts on our nation’s small employers.
For example, the $187 billion of SNAP cuts not only ends a critical
lifeline for seniors, children, older adults, veterans, but it also
harms small businesses. SNAP supports more than 200,000 jobs in
independent grocery stores and another 45,000 jobs in agriculture,
manufacturing, and transportation industries. It is not complicated.
When consumers can no longer afford their groceries, those stores
suffer.
Under this bill, the rich get richer and the rest of us have fewer
means to support the small businesses in our district. We might do
less dry cleaning, wait more weeks between our hair cuts, eat out
less or perhaps not at all. Americans feel it in their pocketbooks
and in their everyday lives. The One Big Beautiful Bill is anything
but beautiful. It is ugly, it is mean, and it makes the American
Dream even harder to realize.
Mr. Negron, would you generally agree with the analysis pre-
sented here, and would you agree with the sentiment that, if it
comes out of your pocket, it doesn’t matter what you call it?
Mr. NEGRON. Yes.
Mr. OLSZEWSKI. And I know you had an engagement with Rep-
resentative Tran, so I don’t want to reengage that too much, but
that analysis excludes gas and the surcharges that you talked
about. It excludes the fertilizer cost and the rising cost of food, the
increases in mortgage rates. Isn’t that yet another cost that Ameri-
cans are bearing?
Mr. NEGRON. That is right. The analysis that is on that chart
there, I have colleagues at the Center who worked on this or a
similar chart, and that was based solely on the cuts and the tariffs,
not factoring in the cost of the Iran war, which show that this pic-
ture looks even dimmer for working Americans.
Mr. OLSZEWSKI. And we know that we are also in the midst
of a cost-of-living crisis after years of high inflation. Over a year
ago, we finally had inflation trending back down in the right direc-
tion.
How has inflation been under this administration, and what poli-
cies would you have Congress consider to bring down the cost of
living?
Mr. NEGRON. Yes. Well, we have seen inflation indicators start
to—one, they have kind of stayed sticky around 3 percent, so above
the federal reserve’s target rate for most of the life of this adminis-
tration. There are studies, one in particular from the Harvard
Business School, that believes that about .7 percent of CPI inflation
is due to tariffs. And so we have had persistent inflation higher
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than what would have happened had the tariffs not been in place.
The Iran war is threatening to accelerate it even further.
And so quick list of things that you could do or that one could
do is, one, pull back these Section 122 tariffs the President put in
place after the Supreme Court struck down his emergency tariffs.
That is one example.
You could restore the Enhanced Premium Tax Credits which will
help more than 20 million Americans better afford their health in-
surance.
You can get more serious about building new homes. You can get
down cost of housing by moving this bipartisan bill in the House,
the Housing for the 21st Century Act. There is the bipartisan
ROAD to Housing Act in the Senate. Move those bills, build more
homes, that will get housing costs down. Just three examples that
come to mind.
Mr. OLSZEWSKI. Appreciate that.
Americans are being crushed. It is time that this Congress actu-
ally do something and push back against policies that are hurting
everyday working Americans.
With that, I yield.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Meuser from the great State of Pennsylvania
for 5 minutes.
Mr. MEUSER. Wow. Okay. Hey all, how are you?
Thank you for your work, thanks for being entrepreneurs, thanks
for driving our economy. And our role here is to try to assist that,
right. I mean, that is what you would hope your government would
do. Be advocates for small business, particularly on this Com-
mittee, and do everything possible to remove the barriers so as you
could grow your businesses, your enterprises, treat your employees
well, and build products that are useful.
I spent nearly 25 years doing that, helping grow a small business
to a large business.
How the government thinks and some members think that rais-
ing your taxes by a lot, 25 percent perhaps, is a good thing and
somehow is ugly and evil and all those other things is insane. Also,
let’s—or just highly irrational or completely illogical or just polit-
ical commentary, because we are told that the BBB or Working
Family Tax Cut was all about billionaires. Okay.
I have 795,990 people in my district. Not one of them is a billion-
aire. Okay? I don’t work for billionaires. Okay? None of us do. So
the—what we are able to at least celebrate today on tax day is the
fact that you are getting returns, the fact that 25 million small
businesses are paying 22 percent less taxes than they would have
if we would have abided by what every single Democrat in the U.S.
House and the U.S. Senate voted for.
As well, 26 million people are receiving no taxes on overtime. In
some cases, that adds up to $3,000, $4,000. We have 6 million peo-
ple, elderly, who are receiving Social Security that are not paying
any taxes on the $6,000 deduction on Social Security. So there is
all kinds of—and that is a reason why our economy, even in spite
of the other issues that need to be resolved, is doing extremely well
certainly versus the rest of the world, from an energy standpoint
and everything else.
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So anyway, I will just ask you, Mr. Watson, do you feel that the
environment that you are in that has been created over, say, the
last 12 months—now, I know the tariffs are definitely an issue. I
mean, let’s talk about that. The problem is, though, in 2019, 2020,
we had 50 percent tariffs against us from our number one compet-
itor, China. That was very, very difficult. I know from the indus-
tries that I was in companies were being wiped out because of that.
Products were coming in, literally they were selling them for what
my industry they were making them for. The President wasn’t
going to live with that anymore because how manipulative their ex-
change rates are and their ability to have slave labor basically.
Okay? So they had huge tariffs on us. We had no tariffs on them.
That has been reversed. India—and you know what? Our allies
in Europe, really the same thing. And Canada. Canada had, you
know, on our dairy farmers and everything else, had basically an
embargo on dairy for American imports and we had a 3 percent or
2.5 percent tariff on them. Guess what? We rethought tariffs and
we are reversing it and eventually it will be—it will be equal. That
is the whole idea to create that true parity.
But anyway, the tax cuts, today is tax day. How has the—what
they refer to as the ugly bill, how has it benefited you?
Mr. WATSON. So I think just speaking broadly on the tariff
point real quick, I think certainly it is the case if we can get to a
equilibrium where we are feeling good in terms of bilateral trade
and those agreements are better when we are on solid footing and
there is more parity there in terms of other nontax, you know,
trade barriers, that would be a win. I think the question is, how
long will that take, and what is the uncertainty and disruption in
the meantime? So hopefully we can get there, if not in this admin-
istration, in the future when it comes to trade policy overall.
Mr. MEUSER. In this administration, I agree with you.
Mr. WATSON. Yeah. And then on the tax cuts, I think—you
know, I think it is important to say that a big part of that under-
lying law was making permanent the 2017 cuts which avoided a
tax hike on 62 percent of Americans. And that is really going to
kick in next year because that is—during the next year’s tax filing
season, because they would have had that higher tax bill then. So
I think that is another thing on top of the new cuts.
Mr. MEUSER. Ms. Tapani, real quick, are any tax credit you
mentioned expensing and bonus appreciation, your thoughts?
Ms. TAPANI. The R&D tax credit is incredibly important to
small businesses, and I know a number of them who are using the
money that they are saving through the R&D tax credit to reinvest
in their businesses, to expand their facilities, and we see that time
and time again.
Mr. MEUSER. Thank you all very much.
I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Goodlander from the great State of New
Hampshire for 5 minutes.
Ms. GOODLANDER. Thank you, Mr. Chairman. And thank you
to our witnesses for being here today for this important hearing on
H.R. 1, the President’s so-called Big Beautiful Bill.
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I must say this bill has been absolutely brutal for my home State
of New Hampshire. It has been brutal for New Hampshire small
businesses. And we have talked a lot about why that is so in this
hearing today, but just to share with you, healthcare costs have
been jacked up for every small business in my State, and that is
because of the biggest cuts to healthcare in American history. We
have seen our best healthcare providers literally go out of business
because of these cuts.
We have some of the highest energy costs in America in New
Hampshire, and they have only gone up as a direct result of this
bill. The invoice is extreme and it has been absolutely brutal for
the hardworking people of my State.
We have talked about what was supposed to be one of the real
upsides of this devastating blow to working people, which was
making the Section 199A deduction permanent, and we have talked
about who has benefited from this.
Mr. Negron, I just want to give you an opportunity to say a bit
more on that front. You know, when I look at small business people
in New Hampshire, we are talking about, on average, an annual
salary of $124,000, which is actually pretty good in terms of the na-
tional average. So can you just—in your written testimony, you
really put a fine point on this, what we are talking about in terms
of the share of who is actually benefiting from this Section 199A
deduction.
Mr. NEGRON. Yes. Happy to. So a couple things that I would
point out. So first, about half—a little under half of the filers for
the 199A deduction made less than $150,000 in income in the year
in which they filed. They received 6 percent of the benefits of the
deduction. The 10 percent of taxpayers who filed for the deduction
who made more than $500,000 received two-thirds of the deduction.
And so you can see that there is a major difference in who is re-
ceiving the benefits just in terms of dollars. And so that is, I think,
probably captures most of the story there.
Ms. GOODLANDER. And so that 6 percent who did capture the
benefits, I think you mentioned that the benefits were around
$429?
Mr. NEGRON. Yes. $425, yeah.
Ms. GOODLANDER. And you put that up against the costs of
the trade war, which is what I want to come to in a second, and
where do we end up when you do the final math on that?
Mr. NEGRON. Well, I think it is in the negative generally when
you look at the higher cost due to tariffs. And, you know, happy
also to talk about gas prices. I don’t know if you were going to take
me there, but——
Ms. GOODLANDER. Yes, we will go there. But first I want to
talk about red tape and compliance costs, because, Mr. Watson,
your testimony should give each and every one of us pause. We are
talking about $536 billion in compliance costs for the U.S. Tax
Code, 7.1 billion hours spent complying with IRS tax filing and re-
porting requirements every year. For Section 199A, you pointed out
this is a major source of complexity, which may explain why work-
ing people and small businesses aren’t benefiting from it. You men-
tion in your written testimony $20 billion in compliance costs in
2024 alone.
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Can you talk to us about how we can cut the red tape and sim-
plify?
Mr. WATSON. Sure. I think there is several options there. Of
course, one is with 199A in particular, there are, you know, a series
of restrictions and guardrails meant to, you know, for good reason,
try to reduce a tax avoidance, reclassifying income, so there is
these wage and capital limitations built into the law. But for folks
particularly who are not extremely high earners, that is a source
of complexity and confusion, especially if there are entire industries
that don’t qualify. If folks don’t know that getting into business,
that could be a rude awakening and surprise there.
So I think there are options to simplify that, to either better tar-
get the deduction, especially to encourage more investment, which
I think is something that we did see in the 2025 law that we could
do more of to target in that—dial in that deduction more, and that
could actually save a little bit of money too.
More broadly, I think, and on tax day it is really important that
there is still a lot to be done. There was a big emphasis in my testi-
mony on broader complexity. Folks are still feeling the pressure
there. There are a lot of forms that they have to file. The IRS is
going through a lot of tumultuous issues nowadays, and there is a
lot of paper forms too that they are still dealing with. So
digitization, taxpayer services are also going to be essential.
Ms. GOODLANDER. And the IRS has never been dealing with
staffing cuts in the way they have, which has really harmed small
businesses. I am out of time, but I want to thank our witnesses
again.
I yield back, Mr. Chair.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Dr. Morrison from the great State of Minnesota
for 5 minutes.
Ms. MORRISON. Thank you, Chairman Williams and Ranking
Member Velázquez, for holding the hearing. Thanks to our wit-
nesses for being here today.
During the past few weeks, I had the opportunity to meet with
small business owners throughout my district, and what I have
been hearing over and over again is that this is just a really hard
time for small businesses.
Last year, they were hit with unexpected and unpredictable tar-
iffs, as we have discussed this morning, which they are still being
forced to pay, despite the Supreme Court ruling. Earlier this year,
during Operation Metro Surge, small businesses across Minnesota
sustained heavy losses in sales and revenue, and now they are fac-
ing soaring energy prices and supply chain disruptions due to
President Trump’s war on Iran.
Our small businesses are reaching a breaking point, and re-
branding the so-called One Big Beautiful Bill Act isn’t going to
solve any of the problems this administration has created for them.
Mr. Watson, I appreciated that during your testimony you high-
lighted that much of the economic damage caused by President
Trump’s tariffs fall on small business and how this results in high-
er costs for consumers and declining wages for workers. For nearly
a year now, I have been asking this administration to exempt small
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businesses from these tariffs. Would you support a tariff exemption
for small businesses?
Mr. WATSON. I think that, yeah, there is strong rationale for
that, especially keeping even the de minimis exemption that is
being challenged by the administration in place at minimum for
businesses that have small dollar items that are going across the
border. It is particularly helpful for them.
Ms. MORRISON. Appreciate that. Thank you.
Mr. Negron, the Center for American Progress estimates that
over 5 million small businesses get their health insurance from the
Exchange and 4.4 million saw an average premium increase of over
$1,500 because the Republican majority let the Enhanced Premium
Tax Credits expire.
Why was the expiration of these premium tax credits especially
hard on small business owners and employees?
Mr. NEGRON. Well, I think there is—in a couple of ways. One,
many small business owners themselves receive their healthcare
coverage through the exchanges, but we also know a large share
of employees at small businesses, particularly under 25 employee
businesses, receive their care through the exchanges. Of the 20-
plus million who receive care through the exchanges overall, about
half are either small business owners, self-employed individuals, or
employees of these really small businesses. And so it is not just di-
rectly out of the pocketbook of the business owner, but for many
it is affecting their employees and their ability to be competitive as
a hiring destination because larger businesses can offer better ben-
efits.
If you are a really small business, knowing that the exchanges
are out there, it allows you to compete for workers in a way that
you couldn’t if that wasn’t there or if the coverage was much more
expensive.
Ms. MORRISON. I appreciate your explaining that. You know, I
am a physician myself, and watching the effects of this One Big
Beautiful Bill are pretty heartbreaking. We are creating a
healthcare catastrophe that is going to have to be addressed.
I also want to note that while some of the One Big Beautiful Bill
was offset by cutting critical food assistance and healthcare for mil-
lions of Americans, much of it was not paid for and will add over
$4 trillion to our national debt over the next 10 years.
Mr. Negron, how will this affect capital for small businesses and
our economy overall?
Mr. NEGRON. Well, I think you are seeing it in a number of dif-
ferent ways now, and it will play out depending on the outcome of
these tariffs and the outcome of the war in that higher costs across
the economy could start to slow demand. We have already seen the
job market slow down considerably. 2025 was the worst year for job
creation since 2003, outside of a recession year. And when you look
at the data, you see that liberation day is a clear dividing line. Job
growth was more than 100,000 per month prior to April 1—or prior
to April 2, and since then it has been fairly anemic.
And so these are trends that if they are not reversed because of
changes in tariff policies or changes in the war, you could see that
continue to act as a drag on the economy. We could see borrowing,
cost of capital remain elevated because of a lack of confidence about
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the federal fiscal situation, so Treasurys could remain elevated,
which will result in higher borrowing costs. We are already seeing
that in the mortgage market. Mortgage rates had gotten below 6
percent for a brief spell in late February and have since gone back
up to just under 6.4 percent driven by this war.
And so there is a lot still to be done. Decisions could be made
to change course, but at the moment, these different factors will
slow down the economy, and it really didn’t need to be that way,
because the economy is resilient, but all of its headwinds are due
to policy decisions that are being made by the administration.
Ms. MORRISON. It is a pretty chilling prognosis, but I agree
with you, it is not too late. We could change course. The Republican
majority could stand up to this President.
Thank you, Mr. Chairman. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I would like to thank our witnesses today for their testimony and
for appearing before us today. And we are praying for the Borbolla
family as you go the next day or two.
Without objection, Members have 5 legislative days to submit ad-
ditional materials and written questions for the witnesses to the
Chair which will be forwarded to the witnesses. I ask the witnesses
to please respond promptly.
If there is no further business, without objection, this Committee
is adjourned.
[Whereupon, at 12:16 p.m., the Committee was adjourned.]
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APPENDIX
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Æ
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File and source
- File
- CHRG-119hhrg63455.pdf
- Size
- 22,168,759 bytes
- SHA-256
- 22c65a55a6fbc6266bd74529fdf91a30a9be0e786264e6c7ecb4c875d205e81e
- Our copy
- CHRG-119hhrg63455.pdf
- Original
- www.govinfo.gov