Rep. David Kustoff, R-Tenn., a member of the House Ways and Means Committee, unveiled legislation aimed at delivering further tax relief to small businesses.
The move comes as Republicans look to pair pro-growth tax policy with their push to fund the Department of Homeland Security.
The proposal, which was first shared with CNBC on Tuesday, would increase the qualified business income deduction for noncorporate business owners to 23%, up from the current 20% level established under President Donald Trump's 2017 tax reform.
"This bill is good policy," Kustoff told the outlet. "It benefits small businesses across the country. It benefits family farms."
The measure reportedly has six House Republican co-sponsors. It was introduced the same day Senate Republicans released legislative language to begin funding parts of DHS, which has faced a shutdown since mid-February.
Republican leaders are seeking to use the budget reconciliation process to bypass Democrat opposition and secure funding for DHS components tied to immigration enforcement.
Reconciliation allows legislation to pass the Senate with a simple majority. It avoids the 60-vote threshold typically required to overcome a filibuster.
Republicans previously used the process in 2025 to pass their sweeping tax-cuts-and-spending package known as the "one big, beautiful bill."
The reconciliation resolution unveiled Tuesday does not include directives for tax-writing committees. Still, Kustoff told CNBC that there is room for changes before final passage.
Lawmakers are also considering additional reconciliation efforts before the end of the current Congress. That could provide another path to advance Republican tax priorities without Democrat backing.
"It's moving in real time," Kustoff said. "And that's a reason I thought, and my colleagues thought, that this bill should be filed now. There's a possibility that we could get on the reconciliation train."
Kustoff said the small business deduction was designed to level the playing field after corporations received tax relief under the 2017 Tax Cuts and Jobs Act. That law reduced the corporate tax rate from 35% to 21%.
The 20% small business deduction was later made permanent in the 2025 Republican tax package. The new proposal would expand that benefit.
The plan could carry a significant cost. The nonpartisan Joint Committee on Taxation estimated in December 2023 that the 20% deduction would reduce federal revenues by $57.6 billion in 2024 and $60.9 billion in 2025.
Kustoff said he is confident the proposal will gain support among Republicans. If included in reconciliation legislation, lawmakers would need to identify a "pay-for" to offset the cost.
He noted that "the benefits, from a revenue standpoint, would offset the cost."
Nicole Weatherholtz ✉
Nicole Weatherholtz, a Newsmax general assignment reporter covers news, politics, and culture. She is a National Newspaper Association award-winning journalist.
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