House Taxwriter Talks Democratic Priorities, Responds To OBBBA
In this episode of Tax Notes Talk, House Ways and Means Committee member Steven Horsford, D-Nev., discusses the New Democrat Coalition's tax priorities and the framework the coalition developed as an alternative to the One Big Beautiful Bill Act.
Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity.
David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: alternate view.
As we covered on last week's episode, the One Big Beautiful Bill Act was signed into law by President Trump on July 4. This legislation was championed by Republicans in both chambers of Congress, and no Democrats ended up voting for the final bill. As the bill was making its way through Congress, the New Democrat Coalition released their own tax framework. The coalition is made up of 115 House Democrats who describe themselves as center-left. The framework outlines their tax priorities and policy ideas, as well as long-term plans for the 2026 midterms.
Tax Notes Capitol Hill reporter Katie Lobosco recently sat down with Representative Steven Horsford, a Democrat from Nevada on the House Ways and Means Committee and the leader of the coalition's tax task force, to discuss the framework, the Republican tax package, and future goals.
Before we jump into that interview, I should note that we have reached out to several Republican lawmakers to come on the podcast and discuss the One Big Beautiful Bill Act and their party's future tax plans. We hope to have an interview sometime soon.
This episode is part of our ongoing series on the One Big Beautiful Bill Act, and as we dive deep into the most important tax changes and provisions in the coming weeks, or even months, we'd like to hear from you. If there's an aspect of the bill that you'd like to hear or discuss, please email us at podcast@taxanalysts.org.
But for now, let's go to Katie's interview with Representative Horsford.
Katie Lobosco: We have Congressman Horsford with us for the podcast today. Welcome, Congressman. How are you?
Rep. Steven Horsford: I'm doing great. Thank you for having me on.
Katie Lobosco: Thanks for giving us the time. So, what would you say are the overall goals of the New Democrat Coalition's tax framework?
Rep. Steven Horsford: Well, first, thank you for having me on. It's great to be with you. I want to start by talking about the fact that tax policy can sometimes be wonky, but it actually really is about centering the needs of working people, the middle class, small businesses. And this is not a moderate plan; this is not a progressive plan; this is simply a better plan than what our Republican colleagues just pushed through the House of Representatives and the Senate with two votes to spare.
Specifically, it's a three-pillar plan that centers the relief for working families first. Instead of giving tax breaks to billionaires and to big corporations, we believe in centering and rewarding work, not wealth, and making sure that we're making the lives of working families more affordable through our tax policy.
Secondly, it's about supporting and growing economic growth through using our tax policy to incentivize the behaviors that we want to see in small businesses, and to unleash the investments that need to happen in and with small businesses, which are really the engines of our national economy.
And then, finally, the third pillar is around promoting fiscal responsibility and long-term economic security. Our plan that rewards work and not wealth, that doesn't add $4 trillion to the federal debt, it puts the investments where you have the greatest returns, and it ensures that tax policy supports — not undermines — America's long-term economic health.
Katie Lobosco: So when we're looking at some of these specific tax policies, it appears that some provisions in the Republican package that was signed into law on July 4 align with some of your policy proposals. I'm thinking the expanded child tax credit, boosting the low-income housing tax credit, restoring immediate expensing for R&D costs. What was left out, or what else is there, or how would you change some of those provisions?
Rep. Steven Horsford: So for the child tax credit, which, when Democrats were in the majority with President Biden and Vice President Harris, we were actually able to lift 50 percent of children out of poverty. We need to permanently extend and expand the child tax credit, unlike the temporary proposals by the GOP. Yes, we need to modernize the child and dependent care tax credit. In my home state here in Nevada, working families pay upwards of 17 percent of their monthly income on child care, and they have no relief in sight. The New Democrat Coalition's proposal actually centers the needs of working families by giving them the relief from the dependent care and the child and dependent care tax credit. We also, though, need to strengthen the low-income tax credit in housing to expand affordable housing.
Welcome to Nevada road sign along State Route 373 near Death Valley
And most importantly, probably, right now is to extend the enhanced Affordable Care Act premium tax credits to keep healthcare affordable. So while Republicans just voted to take away healthcare from 17 million Americans, the New Democrat Coalition is about protecting the healthcare and making it more affordable for more Americans.
We also believe in preserving the clean energy tax credits, which are also growing segments of our economy, especially in renewable energy, through solar, wind, and geothermal projects. The Republican plan literally is the largest jobs cut — three and a half million jobs will be lost — because of the phasing out of these clean energy tax credits. Because they're not focused on the middle class, they're more focused on giving tax breaks to billionaires and the big corporations.
Katie Lobosco: On those clean energy tax credits, now, I know a lot of more moderate Republicans, they also aren't happy with the way these were phased out and repealed. Do you think there's a political will for some kind of bipartisan fix now that that bill is law? Could you foresee some possibility to change or slow or soften some of those rollouts of the clean energy tax credits?
Rep. Steven Horsford: Well, if they would listen to their constituents, they should have never voted for the bill to begin with, because it is the largest job-killing provision of the Republican — they call it the Big Beautiful Bill, it's a big ugly bill. They may be getting calls now from the building trades and the members who belong to those building trade unions, because those are jobs.
Yes, it's about promoting and producing more clean energy projects, which in my state, I have more than a hundred billion dollars of clean energy projects in Nevada right now under development. These clean energy tax credits are imperative. In fact, I just met with one of the clean energy projects that told me that unless they can get their project constructed in the next 18 months, they would lose the ability to move forward on a project that's over $600 million of development in our community. So I'm willing to work across the aisle with my colleagues, but they never should have voted for a job-killing bill that included eliminating the clean energy tax credits. And they may have remorse now, but they really shouldn't have done it to begin with.
Katie Lobosco: I know Ways and Means Chair Jason Smith has mentioned that maybe there's a possibility for a bipartisan tax bill later this year. I'm wondering if you have been in touch with him or anyone else across the aisle or their staff about the possibility of that, and what that might look like.
Rep. Steven Horsford: Well, ranking member [Richard] Neal for the Ways and Means Committee, my chairman, and Mike Thompson, the subcommittee ranking member, have opened those discussions. But the question is, how will Republicans pay for it? They just put a $4 trillion hole in the federal deficit, added $4 trillion by giving more tax breaks to billionaires. So the question is, how will it be paid for? We cannot continue to leverage America's future, our children's future, on increased deficit spending that isn't paid for, particularly to give tax breaks to billionaires like Jeff Bezos and Elon Musk at the expense of small businesses and middle-class families.
But I would like to see action on extending the enhanced Affordable Care Act premium subsidies, because if we don't, another 5 million Americans could see their healthcare insurance go away, or the cost become so high they just can't afford to keep it. Further, I would like to see action on addressing more housing incentives for the development of more housing. The cost of housing is one of the biggest pain points here in Nevada, [and] in other places all across the country. And my colleagues in the New Democrat Coalition, we understand that, and we actually want to incentivize the development of more affordable housing. But we also recognize that we have to support working families, whether it's through child care support or other support, so that families can actually afford to get by every single month.
Katie Lobosco: And to that point, the child tax credit, increasing it has had some bipartisan support in the past. The [New] Democrat Coalition, are you willing to put a number on what you would like to see that go up to at this point? I believe it's a temporary boost to $2,200 in what just passed the Senate and House.
Rep. Steven Horsford: It's one, increasing it. It's also about making it fully refundable and the advance payments, led by Congresswoman Suzan DelBene from Washington. I'm a cosponsor of that legislation. So we need to increase it, make it permanent, have the advance payments so that people are actually getting the payments per month. That's what Democrats did when we were in the majority, and families used those payments to cover school supplies, to buy their kids' shoes.
SEATTLE, WA - APRIL 22: Congresswoman Suzan DelBene, who represents Washington's First Congressional ... More District in the United States House of Representatives, speaks during the March for Science at Cal Anderson Park on April 22, 2017 in Seattle, Washington. Participants were advocating for science that upholds the common good and for political leaders and policy makers to enact evidence based policies in the public interest. (Photo by)
I had constituents who shared with me that their kid needed eyeglasses, and getting that extra $300 a month allowed them to do some of these essentials. And our Republican colleagues have chosen not to provide that type of relief to middle-class families. And that's the Democratic alternative that we are proposing as the New Democrat Coalition.
Katie Lobosco: I want to move on to a different temporary provision that was in this bill, the no tax on tips, which you've been a supporter of that kind of provision. But a bill you introduced also included some guardrails on the tax break to — as you put it — prevent it from being exploited by the wealthy. Are you concerned about some unintended consequences of this new deduction on tipped wages?
Rep. Steven Horsford: Well, let's talk about the difference. So I represent the most tipped workers by percentage than any other jurisdiction in the country. And because of that, I meet with and listen to tipped workers, hospitality workers, almost every day. And what they tell me is they need relief. Whether it's here in Nevada or across the country, there are some tipped workers who make as little as $2.13 an hour. Yeah, I said that — $2.13 an hour. We have a subminimum wage that has not been increased since 1991.
So my bill, the Tips Act, would have not only raised the wage for tipped workers from that $2.13 an hour to at least the federal minimum wage, it also would've put important provisions around the no tax on tips, which I support, but to actually protect it for the people who need it. How? Defining what a tipped worker is so that it can't be abused. Two, ensuring the tipped workers still contribute into their Social Security so that they have that retirement once they complete their career. Three, to ensure that hedge funds can't call a bonus a tip and then avoid tax and other important safeguards.
What is the Republican provision now that's signed into law? It caps it at $25,000. It's actually a deduction, not no tax on tips. It's a deduction against your federal income. And three, most egregiously, it sunsets in three years. It is not permanent like the tax break for billionaires and to big corporations. It is a failed campaign promise that Donald Trump made to tipped workers. He has not delivered on that, just like he hasn't delivered on no tax on Social Security and no tax on overtime. And now the truth is coming out, and I can tell you that tipped workers, workers who work overtime, and Social Security recipients really feel betrayed.
Katie Lobosco: So I guess we will see how Treasury and the IRS put out guidance on this provision. Are you expecting the IRS to better define what a tip is so it does exclude a bonus, like you said, for a wealthy hedge fund manager?
Rep. Steven Horsford: Well, I don't give a whole lot of credibility, unfortunately, to Secretary Bessent at Treasury, which oversees IRS. The same dysfunction that we've seen in tariff policy is what we expect to see in the implementation of other provisions of this bill. Not only are they taking healthcare away from 17 million Americans, not only are they cutting nutrition programs from the most needy, not only are they making it harder for students to go to college or earn a graduate degree, but they're doing it on the backs of working people, adding $4 trillion to the deficit, all to give tax breaks to billionaires.
So while we monitor guidance, the reality is the bill screws America. It does not do what is intended. It does not lift the majority of middle-class families or small businesses, which are the engines of our economy. It provides more of the relief to the very wealthy and to the well connected. We have an alternative, and we're going to keep pushing our alternative, because it's not just about being against Donald Trump and the Republicans; it's also what we are for. And the New Democrat Coalition has offered a clear alternative that speaks to lifting up middle-class families, small businesses, and growing our economy together.
Katie Lobosco: The no tax on tips, as you mentioned, was a campaign promise Trump made, I think, when he was in your state. And I've heard you talk about this, though, and I think our listeners would like to hear you explain why, in your view, tips should be treated differently than other kinds of income in the tax code.
Rep. Steven Horsford: So when you get to know tipped workers, they'll tell you. First of all, a tip is a gift; it is not a guarantee. And what has happened over decades is that tipped workers' income has been supplanted by tips that are not even a guarantee. And so, for example, sometimes you get a tip, and it may be 10 or 15 or 20 percent of the bill. Sometimes you may not get anything. And that creates a lot of uncertainty for tipped workers. Again, 6 million of them in this country make as little as $2.13 an hour. You can't pay the rent, cover child care — you can't even pay for gas to get to work on $2.13 an hour.
And so, again, that's why we offered a more comprehensive alternative, which is to raise the wage of tipped workers first and foremost, and then with proper safeguards to allow them to keep more of that hard-earned money in their pocket. And so the difference with tipped workers is, number one, they're already paid below federal wage rates. Only six states pay at least the federal minimum wage for tipped workers in this country. That is so egregious to me that we would even think that it's okay for anyone to make as little as $2.13 an hour.
And so for Donald Trump to come into Nevada or to other places and make this campaign promise and then to renege — he capped it at $25,000, so the person making less than $32,000 only gets to deduct $25,000 of their tipped income. Meanwhile, there's no cap for billionaires on how much they can grift the system. The no tax on tips sunsets in three years. Meanwhile, the tax cut for billionaires is permanent, and it adds $4 trillion to the debt. These are the inconsistencies. It's the hypocrisy, and it shows that Donald Trump is not for working-class families; he's for the rich and the well connected, and it's why we need an alternative to their reckless plan.
PARIS, FRANCE - DECEMBER 7: President-Elect Donald Trump reacts during his meeting with Prince ... More William, Prince of Wales at the Embassy of the United Kingdom's Residence on December 7, 2024 in Paris, France. Donald Trump was among the wave of foreign dignitaries descending on Paris this weekend to attend a reopening ceremony at Notre-Dame Cathedral, more than five years after it was damaged in a major fire. (Photo by)
Katie Lobosco: And there's another provision that affects your constituents that got slipped into the bill when it was being negotiated in the Senate. It changes the way gambling is taxed, lowering a deduction on losses to 90 percent from 100 percent. Some of your colleagues have introduced bills that would restore the 100 percent deduction. Do you support those efforts?
Rep. Steven Horsford: I do. In fact, I've cosponsored legislation to fix it. They can't even tell us how the Republicans were able to sneak this provision in. And here's the most egregious part: There was no hearing in the Senate. They didn't have a markup like we did in the House Ways and Means Committee. We went, I believe, over 14 hours in the Ways and Means Committee, debating provision after provision, offering amendment after amendment, ensuring that these types of provisions weren't snuck in. Unfortunately, there was no hearing in the Senate.
And here we are now with a provision that hurts the gaming industry. It hurts the players and the patrons, who are the people who helped support our industry, which is going to lead to job losses if it's not fixed. So I have cosponsored this legislation. It's been introduced, the Fair Betting Act. And I hope that my Republican colleagues see that this provision needs to be fixed just like other provisions around the child tax credit, the Affordable Care premium tax credit, and other provisions need to be addressed. And that is why this New Democrat Coalition alternative is a path forward.
Let me say it like this: It didn't have to be this way. Republicans chose to make this a partisan exercise. To be clear, reconciliation gets used by both parties, but Democrats didn't use it to enact permanent tax policy for the foreseeable future. That's what Republicans chose to do. They could have worked across the aisle with Democrats in the New Democrat Coalition, including myself, to find common ground and to do it in a balanced way that lifts middle-class families, small businesses, and that grows our economy. But they chose to take this reckless path that favors the well off, and because of it, Americans will be hurt.
Katie Lobosco: And just on that note, yes, so many of your priorities and your goals — I think Republicans would say they agree with helping working families and small businesses. Is that by design for a way for the coalition to work across the aisle? And are you optimistic that you can get some bipartisan work done here in the next year?
Rep. Steven Horsford: Well, this is what I know from my constituents. They expect me as their representative to put the priorities of their family, their households first. And I believe that where broad unity exists, we should be able to build on this framework and to get bipartisan support for the provisions in it. Had the Republicans extended that opportunity, this could have looked a lot different, and we could have made a lot more families whole and put them in a position to grow — to have the opportunity to not just survive, but to thrive. And these are priorities that I hear directly every day from my constituents all across Nevada.
They don't want tax breaks for gun silencers; they want to keep their healthcare. They want housing to be more affordable. They want the small businesses in their community to have the support to start and to grow. And they want to protect retirement and have that security after a lifetime's worth of work, and they want their children to go to good schools. All of these can be done when you have a balanced, fair, and just tax policy. And that is what the New Democrat Coalition is working towards, and we're willing to work with anyone on either side of the aisle and in the administration who sees the values of these good ideas.
Katie Lobosco: All right. Well, Congressman, thank you so much for your time today.
Rep. Steven Horsford: Really appreciate you having me on. Again, taxes can be wonky, but they affect everybody's everyday lives, and we're proud to put forward this plan and to continue to work to lift up the values that our constituents expect.
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