House nears vote on bipartisan child tax credit and business tax bill
The House Considers Major Bipartisan Proposal to Expand Child Tax Credit and Renew Business Investment Deductions
The House is gearing up to discuss a significant bipartisan proposal that aims to expand the child tax credit.”>child tax credit and renew crucial business investment deductions. House Majority Leader Steve Scalise (R-LA) has added the legislation, known as H.R. 7024 or the Tax Relief for American Families and Workers Act, to the schedule for Wednesday.
This floor vote has been highly anticipated, especially as some Democrats and Republicans have expressed reservations about the bill. On Tuesday, New York Republicans even attempted to halt action on the House floor to demand changes to the legislation. House Speaker Mike Johnson (R-LA) is determined to push the bill through, but it will require a two-thirds majority vote to pass, meaning it needs support from both parties.
The leadership’s goal is to pass the bill into law in time for tax season, which typically begins at the end of January.
Expanding the Child Tax Credit and Renewing Business Investment Deductions
The legislation focuses on two key areas: expanding the child tax credit and restoring expired tax breaks for business investment. Both Democrats and Republicans have long advocated for these measures.
Business groups have been particularly vocal in urging lawmakers to pass the bill. They argue that the expired provisions have been detrimental to their companies and the overall economy.
- The legislation renews a tax deduction for research and development costs, which businesses have been unable to claim since it expired. This change will alleviate the higher tax burden they have faced.
- The bill also temporarily pauses the phaseout of bonus depreciation, a provision from the 2017 Trump tax cuts. This provision allowed companies to immediately write off certain capital expenditures instead of spreading the deductions over the asset’s useful life.
On the child tax credit front, the bill seeks to make the credit more generous by changing the calculation on a per-child basis. It also increases the maximum refundable amount per child over the next few years.
Lower-income families stand to benefit the most from the proposal, as it raises the current cap on the refundable portion of the credit.
Critics from Both Sides
As with most legislation aimed at appeasing both parties, there are critics from both the Left and the Right.
Some Democrats believe that the enhancement to the child tax credit should be even greater. In 2021, shortly after President Joe Biden took office and Democrats controlled both chambers of Congress, they passed a significantly expanded, albeit temporary, child tax credit. However, those enhancements have since expired. The current proposal includes work requirements, which Republicans consider a red line.
Additionally, some Democrats argue that the legislation prioritizes tax breaks for corporations over assistance for struggling families. Senator Elizabeth Warren (D-MA) expressed her concerns, stating, “We should demand more of ourselves than going along with a deal that gives big corporations billions and billions of dollars more in tax breaks than help for struggling families.”
On the Right, there are concerns about the bill’s cost. While the $78 billion bill is fully paid for through changes to the pandemic-era employee retention tax credit, some Republicans believe that the estimate is subject to change and could ultimately add to the deficit. If all the tax breaks were made permanent, it would cost $645 billion through 2033, according to the Committee for a Responsible Federal Budget.
Conservative lawmakers have also raised concerns about the bill potentially encouraging illegal immigration. They argue that it does not do enough to prevent illegal immigrants from claiming child tax credits. However, the bill’s Republican authors have emphasized that providing the Social Security numbers of the children is still a requirement to receive the credit, aiming to limit benefits from being claimed by illegal immigrants.
The bill’s fate in the Senate remains uncertain. However, if it receives approval from both chambers, President Joe Biden has indicated that he would sign it into law.
How do Democrats feel about the measures taken in the Med bill to support middle and lower-income families?
Med at addressing a major issue, there are critics from both sides of the aisle. Some Democrats argue that the bill does not go far enough in providing relief for middle and lower-income families. They believe that the child tax credit expansion should be even more generous and that additional measures should be taken to support families struggling during the pandemic.
On the other hand, some Republicans believe that the bill is too costly and will add to the national debt. They argue that instead of expanding tax credits and deductions, the government should focus on reducing tax rates and regulations to stimulate economic growth.
Despite these criticisms, there is hope that a compromise can be reached. The bill’s bipartisan support is a positive sign that lawmakers from both parties recognize the importance of providing assistance to families and supporting business investment.
Conclusion
The House’s consideration of the Tax Relief for American Families and Workers Act represents a major step toward providing relief to families and supporting business growth. The bill’s focus on expanding the child tax credit and renewing business investment deductions addresses key priorities for both Democrats and Republicans.
While there are critics and concerns from both sides, the bill’s bipartisan support indicates that there is a common understanding of the need to provide support to struggling families and promote economic growth. If passed, this legislation could have a significant impact on both individuals and businesses, providing much-needed relief during these challenging times.
As the House prepares for the crucial vote, all eyes will be on the outcome. Whether the bill passes or not, this bipartisan effort serves as a reminder that even in the midst of political differences, there can be common ground in addressing the needs of the American people.
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