House lawmakers testified Wednesday before the Ways and Means Committee on their tax priorities, highlighting a shared goal to prevent massive tax increases set to hit at the end of the year but exposing divisions on the more nuanced details.

The Ways and Means member day hearing comes as Republicans are in the early stages of crafting a Senate filibuster-proof budget reconciliation package that would extend and expand upon the 2017 tax cut law enacted during President Trump’s first term.

Several Republicans testified to the need to extend the 2017 individual and small business tax cuts set to expire at the end of the year, arguing failure to do so would cause a massive tax increase that will hit already struggling families and entrepreneurs.

“The tax increase iceberg is right in front of us, but with your help, this committee can take swift action to steer the ship in the right direction,” said Rep. Tom Barrett, Michigan Republican. “This is about protecting the livelihoods of the people we serve who sent us here.”

But the hearing also highlighted divisions on key tax policies, including the state and local tax deduction and the child tax credit.

The 2017 law placed a $10,000 cap on the state and local tax deduction, commonly called SALT, which lets taxpayers deduct what they pay in state income and property taxes from their federal income taxes. The SALT cap is set to expire at the end of the year.

Lawmakers from high-tax states such as New York, New Jersey and California want to repeal or at least increase the cap. New York Reps. Nick LaLota and Laura Gillen, a Republican and Democrat who represent Long Island, California GOP Reps. Kevin Kiley and Young Kim and New Jersey Democratic Rep. Nellie Pou were among those who testified to push that priority, arguing that the SALT deduction prevents double taxation.

“The SALT cap made home ownership unattainable for districts like mine,” Ms. Kim said, citing a 60% increase in home prices from 2019 to 2024 in her district, which includes Orange and San Bernardino counties.

“Fixing the SALT cap is not a red or blue state issue. It is all about making homes affordable for my constituents, no matter who they voted for,” she said.

Other Republicans testified against raising the SALT cap.

Rep. Keith Self, Texas Republican, said a more generous SALT deduction unfairly punishes taxpayers in low-tax states like his, asking them to “shoulder the financial burden of another state’s poor policy choices.”

“High tax states like New York and California have adopted agendas that prioritize wasteful spending over sound government,” he said.

Rep. John James, Michigan Republican, said if his party lifts the SALT cap, it’s effectively “giving carte blanche to blue state governors to continue to enact laws and regulations that will hurt their people.”

Mr. LaLota pushed back.

“I won’t deny that Albany’s government is oversized, wasteful and mismanaged, but there’s an inconvenient truth when it comes to federal subsidies: The largest blue states like California and New York contribute far more to Washington than they get in return,” he said, citing the deficit as $263 billion for California and $136 billion for New York.

Mr. James said Republicans lost four members in the most recent election who argued for lifting the SALT cap.

“For the remaining five of our very dear colleagues who are pushing very hard for the SALT cap raising, for the increase in cost of $225 billion over the next decade, that’s $45 billion per seat,” he said. “How much are we willing to pay for a seat?”

By the time House Republicans hope to take up their budget reconciliation package in April, they won’t be able to spare more than two votes if all Democrats oppose the measure, so resolving the SALT debate is paramount.

The hearing also exposed some tension that could boil up over the child tax credit. The 2017 law doubled the maximum value of the credit to $2,000 per child and made other tweaks to expand its access, provisions set to expire at the end of the year.

While many Republicans want to continue the child tax credit expansion, their ideas for doing so vary. At least one Republican, Ohio Rep. Warren Davidson, argued against expanding the child tax credit as part of the budget reconciliation package.

“Using the tax system as a means of redistribution hasn’t worked well,” he said.

Mr. Davidson said Republicans have struggled to find a party-line compromise on the child tax credit and may have better luck working with Democrats.

“I hope we do that in a bipartisan way outside of reconciliation,” he said.

Connecticut Rep. Rosa DeLauro, one of the Democrats who testified at the hearing, would welcome the opportunity for her party to have input in shaping the next expansion of the child tax credit, which she has long championed.

She favors returning to an expanded version of the credit that Democrats enacted during the COVID-19 pandemic that let families receive $3,600 per child under 6 and $3,000 for others up to age 17 in advanced monthly checks rather than having to wait until they file their annual tax returns.

Mr. James touted his bill that would increase the child tax credit to $4,500 per child under 6 and $3,500 per child ages 6-17.

Expanding the child tax credit is “a much better use of money for all Americans than just a few on the coast,” he said.

Mr. Barrett wants to expand the child tax credit to expecting parents, as the current credit doesn’t kick in until the child is born.

“We can provide critical relief at a time when families need it most and affirm our commitment to supporting life-affirming and pro-family policies,” he said.

In addition to expanding the child tax credit, Republicans should support working families by expanding the adoption tax credit and creating a tax credit to help cover the costs of in vitro revitalization, said Rep. Ryan Mackenzie, Pennsylvania Republican.

Rep. Marjorie Taylor Greene, Georgia Republican, urged her colleagues to remember to include the tax promises Mr. Trump made during his presidential campaign, noting she traveled the country with him and he’s more popular in lawmakers’ districts than they are.

“When I saw him and heard him campaign saying loudly, no tax on tips, no tax on Social Security and no tax on overtime, people rose to their feet and cheered loudly, standing ovation after standing ovation,” she said.

While Republicans have broad plans to roll back clean energy tax credits from the Inflation Reduction Act law Democrats enacted in 2022, several GOP members testified about keeping but tweaking the clean fuels production credit.

“As a Republican majority, we should focus our attention to the domestic feed stocks and biofuels, and the eligibility should only apply to our domestic producers,” Rep. Jim Baird, Indiana Republican, said. “This will help us deliver our promise to producers, and this will help us lower the taxes and lower the cost for Americans and restore our energy and dominance.”

Republicans from other midwestern states like Iowa and Minnesota also called to retain tax incentives that encourage use of biofuels and sustainable aviation fuels that will help producers in their states.

“America first needs American biofuels,” Minnesota Rep. Brad Finstad said.

Other tax ideas Republicans proposed during the hearing ran the gamut from creating a tax credit for people and businesses affected by natural disasters to purchase emergency generators to repealing an excise tax on firearm purchases.

While fewer Democrats participated in the hearing considering Republicans are planning a party-line tax bill, there was bipartisan testimony in favor of expanding the low-income housing tax credit to develop more affordable housing.

• Lindsey McPherson can be reached at lmcpherson@washingtontimes.com.