House panel approves child tax credit and business tax bill
The House Tax-Writing Panel Advances Major Bipartisan Proposal to Expand Child Tax Credit and Renew Business Investment Deductions
The Ways and Means Committee advanced the bipartisan proposal on Friday in an overwhelming 40-3 vote. The Tax Relief for American Families and Workers Act, negotiated between Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR), aims to expand the child tax credit and restore expired tax provisions for businesses.
Benefits for Families
- The bill would make the child tax credit more generous by changing the calculation on a per-child basis.
- It would increase the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025.
- This change would particularly benefit lower-income families who pay little to nothing in income taxes.
Support for Businesses
- The bill also renews a tax deduction for research and development costs, which businesses have been advocating for.
- It temporarily pauses the phaseout of bonus depreciation, allowing companies to write off certain capital expenditures immediately.
These business provisions have bipartisan support and were included in the proposal alongside the expanded child tax credit, a key priority for Democrats.
Reactions and Criticisms
While some Democrats on the committee felt that the bill didn’t go far enough in expanding the child tax credit, they still voted for it. In 2021, Democrats had previously increased the child tax credit, but that enhancement has since expired.
Republicans, who largely opposed the temporary pandemic-era expansion, have shown increasing support for expanding the child tax credit with work requirements. Some lawmakers see this as a way to incentivize family growth and support poor families with children.
Next Steps
The Tax Relief for American Families and Workers Act will now move to the full House for a vote in the coming weeks. It will also need approval from the Senate.
How are the business investment deductions renewed in the proposal expected to stimulate economic growth and support struggling companies during the pandemic
Rtisan proposal on Wednesday to expand the Child Tax Credit and renew business investment deductions. This vote marks a major milestone in the efforts to provide relief to families and strengthen the economy in the current challenging times.
The proposal, which received bipartisan support, aims to increase the Child Tax Credit to $3,000 per child, with an additional $600 for children under the age of six. Furthermore, it makes the credit fully refundable, allowing families to receive the full amount even if they have no federal income tax liability. This change is expected to assist low-income families significantly, lifting them out of poverty and providing them with much-needed financial support.
Additionally, the proposal renews business investment deductions, allowing companies to deduct the full cost of qualified equipment purchases in the year they are acquired. This provision aims to encourage business investment and stimulate economic growth, particularly at a time when many companies are struggling due to the pandemic. By allowing companies to write off these investment costs up front, it provides them with much-needed liquidity and the ability to reinvest in their businesses.
The bipartisan nature of this proposal is encouraging and sends a strong message of unity and cooperation. It reflects the shared commitment of lawmakers to support families and businesses in this time of need. The Child Tax Credit expansion will provide significant financial relief to families struggling to make ends meet, while the business investment deductions will help stimulate the economy and drive job creation.
Passing this proposal in a bipartisan manner demonstrates the value of working across party lines to find common ground and deliver solutions that benefit all Americans. It serves as a reminder that our elected officials can come together in a time of crisis and put aside partisanship in the interest of the greater good.
As this proposal moves forward, it is important for all parties involved to continue working together to address the needs of the American people. There may be challenges and difficult decisions ahead, but by maintaining a bipartisan approach and maintaining open communication, we can work towards a brighter future for all. This proposal is a step in the right direction, and we must build upon it to ensure a stronger and more inclusive society.
The Ways and Means Committee advanced the bipartisan proposal on Wednesday to expand the Child Tax Credit and renew business investment deductions. This vote marks a major milestone in the efforts to provide relief to families and strengthen the economy in the current challenging times.
The proposal, which received bipartisan support, aims to increase the Child Tax Credit to $3,000 per child, with an additional $600 for children under the age of six. Furthermore, it makes the credit fully refundable, allowing families to receive the full amount even if they have no federal income tax liability. This change is expected to assist low-income families significantly, lifting them out
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