Skip to content

Ways and Means Advances Tax, Trade, and Foster Care Legislation

December 01, 2023

WASHINGTON, D.C. – The Ways and Means Committee took bipartisan action to address several critical issues facing the country, communities, and families. The Committee approved multiple pieces of legislation to revoke the tax-exempt status of charities supporting terrorist organizations, strengthen economic ties with Taiwan, expand support for America’s veterans, improve state-based efforts to expand access to foster care, enhance the abilities of states to find missing children, and empower U.S. law enforcement in addressing illicit trade activities taking place in coastal waters.

Watch Chairman Smith’s opening statement about all six bills here.

Among his comments on today’s legislation, Ways and Means Chairman Jason Smith (MO-08) in his opening statement highlighted how the Taiwan double-taxation relief legislation protects American interests by strengthening relationships in the Indo-Pacific and provides tax benefits to American workers and employers in Taiwan:

As China continues to harm American workers and employers and threaten our national security, the United States must strengthen our relationships with our allies…Taiwan is and will remain one of the United States’ key strategic partners and allies in Southeast Asia not only because of our shared values of democracy and freedom, but also because of the deep economic ties between us. Congress must do everything in its power to support Taiwan and strengthen that important bond…It is also important to note that the tax relief for Taiwanese employers and workers in this legislation will not take effect unless and until Taiwan first extends the same benefits to American employers and workers.

In remarks about bipartisan legislation revoking the tax-exempt status for entities supporting terrorist organizations, Chairman Smith made clear that American taxpayers should not be subsidizing terrorism: 

Our tax code should not be used to support or finance violent terrorism around the world. This bill revokes tax-exempt status for ‘terrorist supporting organizations,’ defined as groups that have provided material support or resources to a listed terrorist organization within the past three years.

Read Chairman Smith’s opening statement covering all six bills approved by the Ways and Means Committee here.

United States-Taiwan Expedited Double-Tax Relief Act

Introduced by Chairman Smith (R-MO), Ranking Member Richard Neal (D-MA), and 15 bipartisan Ways and Means members, H.R. 5988 strengthens America’s economic ties with Taiwan by providing relief from double-taxation on cross-border investment between the United States and Taiwan

  • Provides targeted and expedited relief from double taxation on U.S.-Taiwan cross-border investment through changes to the tax code.
  • Ensures tax code changes will not take effect until the United States determines that Taiwan has provided the same tax benefits to Americans investing, operating, or working in Taiwan.
  • Authorizes the President to negotiate a more comprehensive U.S.-Taiwan tax agreement once the double-taxation relief provisions in the tax code are in effect.
  • Supports ongoing efforts to combat China’s malign influence in the Indo-Pacific and elsewhere.

READ: Bipartisan Senate Finance and Foreign Affairs Committees Urge Passage of United States-Taiwan Expedited Double-Taxation Act

H.R. 6408 – Ending Tax-Exempt Terrorist Financing

Introduced by Rep. David Kustoff (R-TN) and Rep. Brad Schneider (D-IL), this legislation revokes tax-exempt status for entities that are supporting terrorist organizations.

  • Builds off a Ways and Means hearing in November that laid out the history of tax-exempt charities supporting terrorist organizations, including the Holy Land Foundation that funneled $12.4 million to Hamas.
  • Revokes tax-exempt status for “terrorist supporting organizations,” defined as entities that have provided material support or resources to a listed terrorist organization within the past three years.  
  • Applies to any entity that has tax-exempt status, not solely public charities entitled to receive tax-deductible contributions.

VSO Equal Tax Treatment (VETT) Act

Introduced by Rep. Brad Wenstrup (R-OH) and Rep. Jimmy Panetta (D-CA), H.R. 1432 makes it easier to donate to veterans service organizations (VSOs). 

  • Addresses the current prohibition on VSOs accepting tax-deductible donations if over 10 percent of their membership is not considered “wartime veterans” – a situation common among VSOs supporting veterans of more recent conflicts.
    • 2.4 million veterans do not meet the definition of “wartime veterans” –including veterans of the wars in Iraq and Afghanistan. 
  • Allows deductible charitable contributions to all federally chartered tax-exempt organizations that serve current and former members of the Armed Forces. 

Find and Protect Missing Foster Youth Act

Introduced by Rep. Tony Gonzales (R-TX), H.R. 2426 provides support to states to better identify and track missing foster youth. 

  • Requires the Department of Health and Human Services (HHS) to conduct an evaluation of the protocols established by states to determine the location of missing foster youth and provide a Report to Congress within five years of enactment.
  • Requires HHS to provide states with technical assistance related to determining children’s experiences while they are missing from foster care, including screening for sex trafficking, determining appropriate services, and documenting their work in agency records.
    • Youth in the foster care system are at high risk of going missing or running away from their foster care placements increasing their likelihood of experiencing homelessness, human trafficking, and other exploitation.

Recruiting Families Using Data Act

Introduced by Rep. Dan Kildee (D-MI) and Rep. Randy Feenstra (R-IA), H.R. 2426 helps states address the national shortage of foster families through data to provide safe homes for foster children. 

  • Modifies the current diligent recruitment requirement by developing a “Family Partnership Plan” that asks states receiving Title IV-B funds to describe the processes for identifying, recruiting, and retaining foster and adoptive families, including using data to establish goals, assess needs, measure progress, and track permanency goals for children; and establishes the use of ongoing family advisory boards to improve the retention of foster and adoptive families.
    • Nearly every state struggles to recruit and retain qualified foster parents which has led to a nationwide shortage. A 2020 HHS review found that some states fell short of submitting recruitment information required under existing law and could use additional support in their recruitment efforts. 

Extending Limits of U.S. Customs Waters Act

Introduced by Rep. Michael Waltz (R-FL), H.R. 529 helps Customs and Border Protection fight drug smuggling and sophisticated criminal networks operating off America’s shores.

  • Doubles from 12 to 24 nautical miles the distance off America’s shores that Customs and Border Protection (CBP) can enforce trade laws to board and inspect vessels.
    • In FY 2022, CBP seized 234,349 pounds of cocaine, 75,918 pounds of marijuana, 1,432 pounds of methamphetamine, and 146 pounds of fentanyl. Over 80 percent of these seizures occurred on the water.
  • Codifies two presidential proclamations that clarify the area within which CBP officers may operate off U.S. coasts – bringing it in line with the statutory authorization already provided to the U.S. Coast Guard to operate up to 24 nautical miles.