The Ledger

Chapter 15 of The Briefing: Tom Emmer (R-MN-06), Part Five — The Breach.

In 2017, Congress passed the Tax Cuts and Jobs Act. Tom Emmer voted for it. Both times — initial passage and the conference report.

The bill reorganized the federal tax code along a familiar axis: permanent for business structures, temporary for individuals.

The corporate income tax rate was cut from 35% to 21%. That cut was made permanent. The individual income tax rates were lowered. Those cuts were made temporary — scheduled to expire at the end of 2025.

The Byrd Rule — a Senate procedure that strips provisions from reconciliation bills if they increase the deficit beyond a ten-year window — required the bill to fit within a budget constraint. Reconciliation is the procedural shortcut that allows a simple majority in the Senate. Republicans did not have sixty votes to bypass those rules. The choice of which provisions to make permanent and which to sunset was theirs.

The estate tax exemption was doubled to roughly $11 million per individual — also temporary, set to revert when the individual provisions expired.

Eight years later, in 2025, a sweeping tax and spending package — dubbed the One Big Beautiful Bill Act — resolved the question. Tom Emmer — now the Majority Whip — delivered the House vote: 215 to 214.

The bill made the individual tax rates permanent. That is a real benefit to every worker and family in the district. Every lower bracket stays. Then it went further — and the additional steps are where the permanent column and the temporary column diverge again.

It made permanent the estate tax exemption: $15 million per individual, $30 million per couple, starting in 2026.

It made permanent the deduction available to business owners who report their business income on their personal tax returns — the sole proprietors, LLCs, and S-corporations that make up most of the district’s small businesses. They can deduct 20% of their business profit from their taxable income — a rate that was temporary under the 2017 law and is now permanent, subject to income thresholds and industry restrictions.

It permanently raised the limit for business owners to immediately deduct the full cost of equipment — a new truck, a piece of machinery, a commercial refrigerator — in the year of purchase, rather than spreading it over years. The limit went from $1 million to $2.5 million. A manufacturer in Stearns County who buys a new press or precision equipment can deduct the full cost immediately. It also permanently restored full expensing of production property for larger manufacturing operations.

It made the child tax credit increase permanent — $200 more per child, indexed to inflation going forward.

These are the provisions that do not expire.

The same bill included provisions that do.

A new deduction for tipped income — up to $25,000 per worker — expires in 2028.

A new deduction for overtime pay — up to $12,500 — expires in 2028.

An increased deduction for state and local taxes — raised from $10,000 to $40,000 — expires in 2029 and reverts to $10,000. The deduction primarily benefits high earners in high-tax states; for most households in MN-06, it does not change the filing math.

A deduction for auto loan interest on new American-assembled vehicles expires in 2028.

Senate rules required that something expire. What expired was the service worker’s deduction. What did not was the estate tax shield for $15 million estates.

No explanation was offered to the district.

A contractor in Stearns County earning $150,000 in business income sees the deduction reduce his taxable income by $30,000 a year. The bill did something for him.

The question is what it did for others, and at what scale.

The Joint Committee on Taxation — the nonpartisan congressional scorekeeper — estimated that nearly one quarter of the bill’s tax benefits would go to the top 1% of earners. The top 1% — households earning roughly $680,000 or more a year, holding at least $13.6 million in assets — earns 26.3% of total adjusted gross income and pays approximately 45.8% of all federal income taxes. The tax system is progressive. Those who earn more pay a larger share.

They also hold approximately as much wealth as the bottom 90% of American households combined — their share of the nation’s total wealth has grown from 22.8% in 1989 to 31.7% in late 2025. What is given permanently compounds.

Change in after-tax income relative to pre-OBBBA baseline.

These are averages. The structure is visible: what is given permanently, and to whom; what is given temporarily, and to whom. The code does not hide it.

Consider the estate tax provision.

The permanent exemption of $15 million per individual applies to estates above that threshold. Below it, the estate tax does not apply regardless.

The average farm in Minnesota’s Sixth Congressional District is approximately 183 acres. At roughly $8,000 per acre — the current agricultural land value in central Minnesota — that farm is worth approximately $1.5 million.

The $15 million threshold sits more than ten times above the value of that farm.

Nationally, 89 farm estates paid any estate tax in 2023, out of nearly 40,000 that transferred. 0.2%.

Tom Emmer cosponsored the Death Tax Repeal Act, which would eliminate the federal estate tax entirely. He championed raising the exemption to $15 million as a benefit to Minnesota farmers and small business owners.

The benefit is real for the estates it protects. In the district, the average farm sits more than ten times below the threshold.

The deduction for business owners filing pass-through income scales with income — a business with higher profits takes a larger deduction. The provision is proportional. At higher incomes, it is more valuable.

The primary beneficiaries of this deduction — measured by total dollars received — are not the small plumbing contractors and farm supply stores in the district. They are the larger pass-through entities: law firms, investment funds, real estate partnerships, private medical groups.

The industries that benefited from the permanent provisions contributed more than $6 million to the Whip’s political operation across his career.

When Senate rules required that something be placed in the temporary column, several industries mounted lobbying campaigns aimed at keeping their provisions in the permanent column. The National Association of Manufacturers lobbied for permanent capital expensing. Manufacturing firms are projected to receive $422.6 billion in reduced tax liability over ten years. The proposed reform to the carried interest rule was removed amid lobbying by private equity — the provision that allows investment fund managers to pay capital gains rates of roughly 20% instead of the ordinary income rates of up to 37% that a salaried worker pays. The real estate industry benefits from the permanent pass-through deduction.

The deductions that expired — tips, overtime, auto loans — had a constituency. They did not have an industry spending to secure their permanence.

A pass-through business — a sole proprietorship, partnership, or S corporation — files its income on the owner’s personal taxes. The business profit deduction allows the owner to deduct 20% of that income. The larger the profit, the larger the deduction.

The SALT deduction allows taxpayers to subtract their state and local taxes — income tax and property tax — from their federal taxable income. The temporary increase from $10,000 to $40,000 benefits households earning between $200,000 and $500,000 in high-tax states. Roughly 90% of filers take the standard deduction and are unaffected.

Sources

TCJA votes — Roll 636 (initial passage, Dec 19, 2017) and Roll 698 (conference report, Dec 20, 2017), via house.gov. TCJA enrolled bill text (Pub.L. 115-97). CBO score of TCJA. Senate reconciliation and Byrd Rule — Congressional Research Service. OBBBA House vote (215-214, May 22, 2025) — house.gov. OBBBA enrolled bill text and CBO score documents. Joint Committee on Taxation distribution analysis (JCX-36-25). IRS SOI Publication 1304, Tax Year 2021. Federal Reserve Survey of Consumer Finances 2022. Federal Reserve Distributional Financial Accounts. USDA Census of Agriculture 2022. USDA ERS farm estate tax data. FEC PAS2 bulk data. Tax Foundation. Bloomberg Law. Congress.gov.