House approves bipartisan $78b bill for child tax credit and business investment break
The House Passes Major Bipartisan Bill to Expand Child Tax Credit and Renew Business Investment Deductions
The House of Representatives made a significant move on Wednesday by passing a major bipartisan bill that aims to expand the child tax credit and renew crucial business investment deductions. The legislation, known as H.R. 7024 or the Tax Relief for American Families and Workers Act, received overwhelming support with a vote of 357-70 from members of both parties.
While the bill still faces obstacles in the Senate, there is optimism as the White House has indicated President Joe Biden’s support for the plan. Lawmakers are working diligently to have the bill signed into law in time for tax season, which begins at the end of January.
The Wednesday vote followed intense negotiations in the lower chamber. On Tuesday, four New York Republicans threatened to derail an unrelated procedural vote in protest of the GOP leaders’ decision not to include changes to federal deductions for state and local taxes in the tax legislation. In response, House leadership made a commitment to hold a vote on a second tax bill that addresses relief for these deductions.
The main tax package included in the bill has some notable provisions. It expands the child tax credit by making the calculation more generous on a per-child basis. Additionally, it increases the maximum refundable amount per child from $1,600 to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025, benefiting lower-income families. The bill also indexes the child tax credit to inflation, a long-awaited provision for child tax credit advocates.
Furthermore, the bipartisan bill renews a tax deduction for research and development costs for businesses, a measure that has been heavily advocated for by business groups and prioritized by the GOP. The bill also temporarily pauses the phaseout of bonus depreciation, a provision from the 2017 Trump tax cuts that allowed companies to immediately write off certain capital expenditures.
It remains uncertain how the bipartisan legislation will fare in the Senate and what changes may be made. Senator Bill Cassidy (R-LA) is pushing for the inclusion of changes to a controversial $600 IRS reporting requirement in the tax package.
How does the expansion of the Child Tax Credit contribute to the reduction of child poverty and financial assistance for struggling families?
Child Tax Credit and Business Investment Deductions Act,” received overwhelming support from both Democrats and Republicans, highlighting a rare instance of bipartisan cooperation in Congress.
The primary focus of the bill is to improve and broaden the Child Tax Credit (CTC) to provide additional support to families across the country. The CTC is a tax benefit that allows eligible parents to receive a credit for each qualifying child in their household. The bill proposed increasing the credit amount from $2,000 to $3,000 for each child aged 6 to 17, and $3,600 for children under 6. Additionally, it sought to make the credit fully refundable, ensuring that low-income families receive the full benefit even if they owe no federal income taxes.
The expansion of the CTC is a crucial step towards reducing child poverty and providing financial assistance to struggling families. By increasing the credit amount and making it fully refundable, more families will have access to the support they need to provide for their children’s basic necessities, such as food, healthcare, and education.
Furthermore, the bill also aims to renew important business investment deductions to promote economic growth and incentivize job creation. These deductions provide tax relief to businesses that invest in equipment, machinery, and other capital assets. By renewing these deductions, the bill seeks to encourage businesses to continue investing and expanding their operations, thereby stimulating economic activity and creating new job opportunities.
The bipartisan support for this bill is a welcomed development in today’s highly polarized political climate. It demonstrates a recognition among lawmakers of the urgent need to prioritize the well-being of families and the economy. While there may be disagreements on other policy issues, this bill serves as a testament to the shared commitment to supporting families and promoting economic prosperity.
The passage of H.R. 7024 in the House of Representatives is just the first step towards enacting this important legislation. The bill will now move to the Senate, where it will undergo further scrutiny and potential amendments. However, given the significant support it received in the House, there is an optimistic outlook for its successful passage through the Senate and eventual signing by the President.
If signed into law, the Child Tax Credit and Business Investment Deductions Act has the potential to make a positive and lasting impact on millions of American families. It will provide the financial relief needed to alleviate the burden of child-rearing expenses and bolster the economy by encouraging business investment and job creation.
In conclusion, the House of Representatives’ passage of the Child Tax Credit and Business Investment Deductions Act is a momentous achievement in bridging the partisan divide and prioritizing the welfare of families and businesses. This bill’s success would support struggling families, reduce child poverty, and stimulate economic growth, becoming a significant milestone in shaping a more equitable and prosperous society.
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