INTERVIEW: Rep. Jason Smith nixes any tax raises in possible second reconciliation, discusses Trump’s trade wins, and how OBBB delivers for farmers

Rep. Jason Smith (R., Mo.), the Chairman of the House Ways and Means Committee, told the Washington Reporter in an interview that he wants no tax hikes in any potential second reconciliation package.

“When the Democrats controlled the White House, the House, and the Senate in the first two years of the Biden administration, they passed three different reconciliation bills — two that became law,” Smith said. “In none of those did they ever do anything to increase the top rate that they complained about that we preserved, or increase the corporate rate. They controlled everything, and they couldn't do it. So why would we need their help?”

Reconciliation is, of course, nothing new to the Missouri lawmaker. Smith spent much of recess visiting farms in almost every county he represents in Congress, and he said that the message America’s farmers want to send to President Donald Trump is clear: “thank you for the tax certainty that was within the One Big, Beautiful Bill [OBBB].”

Smith said, while people don’t think of Section 199A of the tax code as relating to farmers, the reality is that “98 percent of all farms are pass-through entities that use the 199A deduction. And that's huge, because that would have meant their tax rate would be around 43.4 percent or 23 to 28 percent, and that's big.”

“The National Federation of Independent Business owners says that provision alone will lead to one million new jobs being created a year for the next 10 years, just by having that permanency,” Smith said.

Other wins in the OBBB that benefit America’s farmers include “the president’s 100 percent expensing for new factories; we broadened that definition of a new factory to also include a production agriculture facility, so barns, all the things that farmers use; farmers can write off 100 percent as well.”

Additionally, “80 percent of the Farm Bill was passed in the One Big, Beautiful Bill, the first time in a decade that reference prices for corn, soybeans, cotton, rice, all the commodities, was increased,” Smith said, adding that “farmers were grateful for that. They've been waiting for it. We were able to deliver the death tax repeal. That’s a huge thing that the farmers continue to bring up. It affected 15,000 farms in just my congressional district alone.”

“The Section 179 expensing” is essential as well, he added. “20 percent of all of the expensing is strictly from farms, which is really big because Section 179 allows people to expense used equipment. And a lot of farmers don't buy new tractors. A lot of the big corporate farms buy new tractors, but the farmers in my area, they buy used ones, so that applies to those people.

Trump’s trade agenda was also at the forefront of Smith’s recess, both at home in Missouri and during a trade mission to Australia.

“People are very concerned with the commodity prices,” he said. “Commodity prices are the lowest they've been in a period of time. But they are willing to stand the brunt of things because they believe more markets need to open up and they support what the president's doing in opening up markets.”

“For example,” Smith continued, “beef prices are the highest they've ever been. Corn prices, not so much. But with beef, you're looking at huge wins that the administration has done on beef, just in the last month. Australia, after two decades of refusing to allow U.S. beef to be sold, they've now opened up that market, the quota that the United Kingdom had on beef, they've increased that dramatically in the recent agreement. They also increased dramatically the amount of ethanol that they'll be purchasing. These are things that are helping the whole gamut, whether it's Japan, whether it's Vietnam, Indonesia, it's opening up those markets.”

While many countries around the world have rushed to make deals with the Trump administration, several more are still pending. “It's extremely important for us to continue to push for agreements with China and India, two very large countries, but they also have a huge impact when it comes to some of our ag producers, like cotton in my area and also soybeans,” Smith said, adding that “when you look at when Trump left office, we had a $5 billion agriculture trade surplus, and then when he came back into office, we had a $50 billion agriculture trade deficit. It was just because of four years of an administration that was out to lunch when it came to trade policy.”

When Smith isn’t focusing directly on reconciliation — something he’s spent years crafting — he has also honed in on reforming both the Internal Revenue Service (IRS) and American higher education.

Smith wants the IRS to “serve the citizen, not the other way around.”

To that end, he said that “we are absolutely keeping direct oversight over the IRS. I have presented the administration a list of reforms that I believe that need to happen at the IRS. I've even presented information to them of non for profits that I believe that the tax exempt status should be revoked on because of terrorism or promoting propaganda that is harmful to the U.S., and we shouldn't be subsidizing that by allowing it to be in a nonprofit.”

One of those nonprofits, The People’s Forum, was the subject of a recent high-profile investigation by Smith’s committee. But the work on the IRS more broadly needs to continue, he said.

“I've also suggested people they need to fire over there, because there are some folks still from the Lois Lerner days who have their hands all dirty who need to go; there are some really great people over there too, but the IRS needs to be an agency that is solely focused on servicing the citizens, not targeting the citizens,” he explained.

Finally, Smith said that while the House’s Education and Workforce Committee stole much of the spotlight when it comes to rampant campus anti-Semitism, he wants to ensure that schools that fail to uphold their responsibilities pay their “fair share.”

Smith’s committee held the first hearing on anti-Semitism following the invasion of southern Israel by Palestinian terrorists, and he said there remains work to be done.

“We've been questioning a lot of the universities, more than a dozen that we have sent letters directly to, demanding answers to various activities that have happened on their campuses,” he said. “That’s one big reason why it led to the endowment tax increase; in the bill that passed out of the House — we had a 21 percent endowment tax on the top tier schools, like the Harvards, the Yales, and the Senate moved it down a little bit, they're not as aggressive they should be.”

“If you have $55 billion in endowment, should you be tax free?” Smith asked. “That's more than a lot of states’ budgets. So they need to pay their fair share.”

Below is a transcript of our interview with Rep. Jason Smith, lightly edited for clarity.

Washington Reporter:

Congressman Smith, I don’t think there is a single farm in Missouri that you did not visit over recess; when you were meeting with these farmers and ranchers, what was your message to them about how they and their industries directly benefit from the One Big, Beautiful Bill, and then what did they tell you to take back here to work on next?

Rep. Jason Smith:

We have been doing these farm tours since my very first year in Congress, and we went to almost all of our 28 counties. We highlighted the diversity of agriculture, because ag is the number one mover of our economy in southeast and South Central Missouri, and so we wanted to promote that, but then we also wanted to be boots on the ground, hearing directly from those farmers, those working families, the small business owners, about the issues that they have been facing in today's economy or in working with the government. What I heard over and over was, ‘thank you for the tax certainty that was within the One Big, Beautiful Bill,’ like the small business deduction. With the 199A, a lot of people don't think of it as being something that helps farmers, but 98 percent of all farms are pass through entities that use the 199A deduction. And that's huge, because that would have meant their tax rate would be around 43.4 percent or 23 to 28 percent, and that's big. The National Federation of Independent Business owners says that provision alone will lead to one million new jobs being created a year for the next 10 years, just by having that permanency. And then, of course, highlighting to a lot of the farmers the president’s 100 percent expensing for new factories; we broadened that definition of a new factory to also include a production agriculture facility, so barns, all the things that farmers use, they can write off 100 percent as well. Some of them didn't know about it, even talking about the ag policies that were within the One Big, Beautiful Bill, which a lot of people don't pay attention to, was important. 80 percent of the Farm Bill was passed in the One Big, Beautiful Bill, the first time in a decade that reference prices for corn, soybeans, cotton, rice, all the commodities, was increased. Farmers were grateful for that. They've been waiting for it. We were able to deliver the death tax repeal. That’s a huge thing that the farmers continue to bring up. It affected 15,000 farms in just my congressional district alone. And so giving that certainty and that protection was pretty big. The Section 179 expensing; 20 percent of all of the expensing is strictly from farms, which is really big because Section 179 allows people to expense used equipment. And a lot of farmers don't buy new tractors. A lot of the big corporate farms buy new tractors, but the farmers in my area, they buy used ones, so that applies to those people. But trade was another thing that they brought up during our farm tour, and people are very concerned with the commodity prices. Commodity prices are the lowest they've been in a period of time. But they are willing to stand the brunt of things because they believe more markets need to open up and they support what the president's doing in opening up markets. For example, beef prices are the highest they've ever been. Corn prices, not so much. But with beef, you're looking at huge wins that the administration has done on beef, just in the last month. Australia, after two decades of refusing to allow U.S. beef to be sold, they've now opened up that market, the quota that the United Kingdom had on beef, they've increased that dramatically in the recent agreement. They also increased dramatically the amount of ethanol that they'll be purchasing. These are things that are helping the whole gamut, whether it's Japan, whether it's Vietnam, Indonesia, it's opening up those markets. It's extremely important for us to continue to push for agreements with China and India, two very large countries, but they also have a huge impact when it comes to some of our ag producers, like cotton in my area and also soybeans. When you look at when Trump left office, we had a $5 billion agriculture trade surplus, and then when he came back into office, we had a $50 billion agriculture trade deficit. It was just because of four years of an administration that was out to lunch when it came to trade policy. The president's been engaging. Every world leader is paying attention and is now trying to work with the administration. We've met with more than 20 countries in the last two months, including myself personally, helping with trade agreements, meeting with the Prime Minister of Australia this week alone, and of course, their trade minister and their treasurer. It's been very helpful.

Washington Reporter:

I don’t think there was a single farm in Missouri that you did not visit over recess; when you were meeting with these farmers and ranchers, what was your message to them about how they and their industries directly benefit from the One Big, Beautiful Bill — and then what did they tell you to take back here to work on next?

Rep. Jason Smith:

We have been doing these farm tours since my very first year in Congress, and we went to almost all of our 28 counties. We highlighted the diversity of agriculture, because ag is the number one mover of our economy in southeast and South Central Missouri, and so we wanted to promote that, but then we also wanted to be boots on the ground, hearing directly from those farmers, those working families, the small business owners, about the issues that they have been facing in today's economy or in working with the government. What I heard over and over was, ‘thank you for the tax certainty that was within the One Big, Beautiful Bill,’ like the small business deduction. With the 199A, a lot of people don't think of it as being something that helps farmers, but 98 percent of all farms are pass through entities that use the 199A deduction. And that's huge, because that would have meant their tax rate would be around 43.4 percent or 23 to 28 percent, and that's big. That provision alone, according to the National Federation of Independent Business owners, says that a million new jobs will be created a year for the next 10 years, just by having that permanency. And then, of course, highlighting to a lot of the farmers the president’s 100 percent expensing for new factories; we broadened that definition of a new factory, to also include a production agriculture facility, so barns, all the things that farmers use, they can write off 100 percent as well. Some of them didn't know about it, even talking about the ag policies that were within the One Big, Beautiful Bill, which a lot of people don't pay attention to, was important. 80 percent of the Farm Bill was passed in the One Big, Beautiful Bill, the first time in a decade that reference prices for corn, soybeans, cotton, rice, all the commodities, was increased. Farmers were grateful for that. They've been waiting for it. We were able to deliver the death tax repeal. That’s a huge thing that the farmers continue to bring up. It affected 15,000 farms in just my congressional district alone. And so giving that certainty and that protection was pretty big. The Section 179 expensing; 20 percent of all of the expensing is strictly from farms, which is really big because Section 179 allows people to expense used equipment. And a lot of farmers don't buy new tractors. A lot of the big corporate farms buy new tractors, but the farmers in my area, they buy used ones, so that applies to those people. But trade was another thing that they brought up during our farm tour, and people are very concerned with the commodity prices. Commodity prices are the lowest they've been in a period of time. But they are willing to stand the brunt of things because they believe more markets need to open up and they support what the president's doing in opening up markets. For example, beef prices are the highest they've ever been. Corn prices, not so much. But with beef, you're looking at huge wins that the administration has done on beef, just in the last month. Australia, after two decades of refusing to allow U.S. beef to be sold, they've now opened up that market, the quota that the United Kingdom had on beef, they've increased that dramatically in the recent agreement. They also increased dramatically the amount of ethanol that they'll be purchasing. These are things that are helping the whole gamut, whether it's Japan, whether it's Vietnam, Indonesia, it's opening up those markets. It's extremely important for us to continue to push for agreements with China and India, two very large countries, but they also have a huge impact when it comes to some of our ag producers, like cotton in my area and also soybeans. When you look at when Trump left office, we had a $5 billion agriculture trade surplus, and then when he came back into office, we had a $50 billion agriculture trade deficit. It was just because of four years of an administration that was out to lunch when it came to trade policy. The president's been engaging. Every world leader is paying attention and is now trying to work with the administration. We've met with more than 20 countries in the last two months, including myself personally, helping with trade agreements, meeting with the Prime Minister of Australia this week alone, and of course, their trade minister and their treasurer. It's been very helpful.

Washington Reporter:

Every Democrat obviously voted against this bill; if they had been successful, that would have resulted in the largest tax increase in American history, and there were zero tax hikes in the first reconciliation. It seems like you want to do it again. Some on the left, who probably won't even vote for it anyway, want some tax hikes on either businesses or investors to raise revenue. Do you think that's a nonstarter? Or do you think this is a thing to consider to try and get Democrats to vote for any second reconciliation?

Rep. Jason Smith:

When the Democrats controlled the White House, the House, and the Senate in the first two years of the Biden administration, they passed three different reconciliation bills — two that became law. In none of those did they ever do anything to increase the top rate that they complained about that we preserved, or increase the corporate rate. They controlled everything, and they couldn't do it. So why would we need their help?

Washington Reporter:

That’s a great point. One thing that I was covering, in addition to your farm visits, was what other colleagues of yours were doing to pitch the One Big, Beautiful Bill. One that I thought was very interesting was when you went to the Reagan Library with your colleagues on the Ways and Means Committee. What do you see about Reagan's legacy in this bill, and were there other anecdotes as you traveled America hearing from business owners that stood out to you?

Rep. Jason Smith:

The day after our recess for August, we held a field hearing at a sign manufacturing facility in Las Vegas, called YESCO Sign. They're known for the Welcome to Las Vegas sign that they've made, and all those famous signs; they've made the outside of Sphere, too. It's pretty neat. We had a hearing there that was bipartisan. 16 different members of the committee were there, — I think it was in Stephen Horsford’s district. If not, it was right on the border of Horsford’s district. We heard from a DoorDash employee who talked about how the no tax on tips allows her to see her family more. We heard from a waiter who said that the savings from the no tax on tips alone will allow him to pay for all of his energy for a year. These are real things that affect real Americans, but you have Democrats saying that ‘it's about the wealthy,’ and we had a lineman there from the sign factory who testified about the no tax on overtime, on how much it would benefit the workforce, because it rewards people who work more and work harder. That's why we had that hearing: to hear from real Americans. And of course, the no tax on tips idea came from a dinner that the president had in Las Vegas from a waitress. So that's the birthplace of the no tax on tips idea. We felt like it was extremely important that that was our first stop. Then the same evening of the Las Vegas field hearing, we went to the Reagan Ranch; we ended up having dinner there as a committee, which they don't do that often. But we also replicated a photo of the Ways and Means Committee members around the same desk and chair that Ronald Reagan used, with the same place in his parking lot in front of his ranch from when he signed the 1981 and 1986 tax cuts, and that was very special. We did it for a reason, and that's why the next day, we had a field hearing at the Reagan Library right there, where we heard about all the growth aspects of the tax bill, because that's what Reagan was known for in the 1981 and 1986 bills. And that's the small business deduction, that's the expensing of R&D, all of those items that we had of how it will have a huge economic impact. So we had farmers, small business owners, manufacturers that highlighted those provisions on how helpful that they would be moving forward. The 1981 tax bill was the largest tax cut in U.S. history, until this one. So that's why it was so symbolic to go to the Reagan Ranch and the Reagan Library.

Washington Reporter:

One of the other things that you've been focusing on in your day job as chair of Ways and Means Committee is reforming the IRS so that it actually does no more than it's required to do.

Rep. Jason Smith:

We want the IRS to serve the citizen, not the other way around.

Washington Reporter:

Recently we saw there was another incredibly political employee who was put on leave after they went on an anti-Trump screed. What is next as you think about that agency? Republicans surged hiring for border agents. The Democrats surged it for IRS agents. Do you like how it's been going so far? There's been a little bit of turmoil there. What are you looking at for what’s next?

Rep. Jason Smith:

We are absolutely keeping direct oversight over the IRS. I have presented the administration a list of reforms that I believe that need to happen at the IRS. I've even presented information to them of non for profits that I believe that the tax exempt status should be revoked on because of terrorism or promoting propaganda that is harmful to the U.S., and we shouldn't be subsidizing that by allowing it to be in a nonprofit. I've also suggested people they need to fire over there, because there are some folks still from the Lois Lerner days who have their hands all dirty who need to go; there are some really great people over there too, but the IRS needs to be an agency that is solely focused on servicing the citizens, not targeting the citizens.

Washington Reporter:

Let’s jump to what you recently did with The People's Forum and its ties to China, this is one of the ones I assume you're referring to here. How do these come across your radar, and then operationally, what happens when you see one of these, and what needs to be done for this organization? You went into great detail about its anti-Western civilization background. How does that happen on your end?

Rep. Jason Smith:

Well, there are numerous different ways. I have a great oversight team. I made the pitch to the House Steering Committee when I was trying to be chairman almost three years ago, that I wanted the Ways and Means Committee to be known for oversight as much as it was for tax and trade and healthcare. In fact, we rebooted the impeachment inquiry; that came through us. We're the ones who found the whistleblowers, and released all of the materials that Jim Jordan and Jamie Comer used. And I ultimately filed the appellate brief in the Delaware court that caused the judge to throw out Hunter Biden’s plea agreement, which led to him being guilty, which led to the President of the United States pardoning his the son for the first time in history. That was oversight from our committee. We've used whistleblowers. I set up a whistleblower hotline. We still get a lot of people who contact us that have told us that we need to look into X, Y, and Z issues at the IRS or various non for profits, for example. We have also gathered some things from media that has reported on different non for profits, and then we dig deeper, and we're like, ‘holy cow, this is serious stuff,’ and we're just trying to make sure it's clean, that it's working for the people, and that the bad actors are being held accountable.

Washington Reporter:

I don't know if you saw one called FLARE that was one of the ones this week that was all over the Hill. But let me know when you're doing oversight on them. Another topic that you work on that isn't conventionally thought of within Ways and Means, has been the higher education accountability. I'm a proud University of Chicago alum, and Northwestern University's president just announced that he will step down in disgrace, because of efforts led by the Ed and Workforce Committee. But also you have been looking into college reform as well; what do you think about what comes next in that sphere?

Rep. Jason Smith:

We held the very first committee hearing after October 7 on anti-Semitism. We didn't make the news like the Ed and Workforce one did, but we were the first committee to do that. Universities have some very generous tax tax assistance, and knowing that our committee is over that jurisdiction, there's a certain level and certain standard that higher ed should live up to because of their tax privilege status. And one thing is not to allow anti-Semitism, that is without a doubt. We've been questioning a lot of the universities, more than a dozen that we have sent letters directly to, demanding answers to various activities that have happened on their campuses. That’s one big reason why it led to the endowment tax increase; in the bill that passed out of the House — we had a 21 percent endowment tax on the top tier schools, like the Harvards, the Yales, and the Senate moved it down a little bit, they're not as aggressive they should be. But if you have $55 billion in endowment, should you be tax free? That's more than a lot of states’ budgets. So they need to pay their fair share.

Washington Reporter:

During recess, you also went on a trade delegation to Australia. Hopefully they're cognizant of their neighbor to the north: China. As you work on trade deals with China and work on looking into groups funded by people like Neville Singham, do they get it there down under, or do they need to learn more from how the Trump administration is looking at China?

Rep. Jason Smith:

Australia views the U.S. and Australia relationship as their most important relationship. They stressed that over and over, during my meetings with their Prime Minister, their Deputy Prime Minister, all the various ministers of trade and finance, but the relationship that we have with them and the security relationship we have, is important. However, we can also have a stronger economic one, and that's one of the reasons why I was there, especially when it comes to critical minerals. It was nice to just see the Prime Minister of Australia tweet out how he had a wonderful phone call just a few moments ago with President Trump talking about how we can grow our trading relationship with critical minerals. There was a real reason why I went down there. The president is very concerned about the supply chain when it comes to rare earths and critical minerals. Australia is home to a lot of rare earths and critical minerals. Australia also has to diversify their trading relationship with China. China is their largest trading partner by far, and whenever things got bouncy, they saw the Chinese do some very negative stuff with them, where it stopped purchasing their rock lobster, and their iron ore and stuff like that, which really destabilized their economy via these pressure points. And the Australians know that they can't allow that to continue. And so that's why they're looking at other trading partners.

Washington Reporter:

I have to ask, from one young Republican to another, did you watch the Crocodile Hunter growing up? I've always wanted to go to Australia.

Rep. Jason Smith:

I did; however, I didn't see any crocodiles. I did see a Tasmanian devil that I got to feed. That was quite interesting.

Washington Reporter:

Hopefully you're feeding them some cattle from Missouri.

Rep. Jason Smith:

I fed it a dead wallaby.