The legislation is aimed at providing tax relief for families with children and for small businesses, while providing incentives for research and development.
The House passed a bill on Jan. 31 aimed at providing tax relief for families with children and for small businesses.
The final tally for the 83-page measure, which would give $78 billion in tax relief to those groups, was 357-70 as 169 Republicans and 188 Democrats voted in favor while 47 Republicans and 23 Democrats voted in opposition. The legislation needed to pass with at least a two-thirds majority.
The Tax Relief for American Families and Workers Act of 2024 was negotiated between Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Jason Smith (R-Mo.).
The bill would allow families to deduct $1,800 on their taxes per child for the 2023 tax year with the amount going up by $100 per year until the 2025 tax year. The credit is refundable.
“Sixteen million kids from low-income families will be better off as a result of this plan, and given today’s miserable political climate, it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead,” Mr. Wyden said in a joint Jan. 16 statement with Mr. Smith.
However, not everyone is on board with the child tax credit aspect.
House Freedom Caucus Chairman Bob Good (R-Va.) blasted the bill as “it massively grows the welfare state by increasing the child tax credit.”
Rep. Suzan DelBene (D-Wash.), the chairwoman of the House Democrats’ fundraising arm, the Democratic Congressional Campaign Committee, said that “the child tax credit expansion would still leave behind millions of kids and families that need it the most.”
Rep. Linda Sanchez (D-Calif.) said that the bill benefits big corporations and leaves behind working families.
But Rep. Ron Estes (R-Ks.) said that bill provides relief to families and small businesses amid the “high cost of goods and services and burdensome regulations.”
Expressing support for the bill, Rep. Danny Davis (D-Ill.) said that “a half a loaf is better than none, but this isn’t even a half a loaf.”
“But I’m going to vote for it because our families and businesses need help.”
“By incentivizing R&D, this plan is also going to promote innovation and help sharpen our economic competitiveness with China and the rest of the world,” Mr. Wyden said.
“My goal remains to get this passed in time for families and businesses to benefit in this upcoming tax filing season, and I’m going to pull out all the stops to get that done.”
The measure, whose agreement was announced by Mr. Wyden and Mr. Smith on Jan. 16, also allows for immediate relief for businesses that invest in the United States and Taiwan.
Additionally, the bill gives tax relief to those in areas impacted by natural disasters, such as wildfires and the East Palestine, Ohio, train wreck that caused lots of toxic pollution.
The legislation also gives a state housing credit to low-income families.
Moreover, the bill winds down a COVID-era tax credit that, according to Mr. Smith, has been “costing taxpayers billions in fraud.”
Republican members of Congress from New York sought to increase the State and Local Tax deduction, or SALT, that is capped at $10,000. Critics say increasing it would amount to red states subsidizing high-tax blue states.
Four New York Republicans almost caused the House to come to a halt as they temporarily derailed a procedural vote on Jan. 31: Reps. Mike Lawler, Nick Lalota, Andrew Garbarino, and Anthony D’Esposito.
They eventually flipped their votes and allowed the vote to succeed but their stand was over their dissatisfaction with SALT not being dealt with in the bill.
Nonetheless, Mr. Smith said, the bill “locks in over $600 billion in proven pro-growth, pro-America tax policies with key provisions that support over 21 million jobs.”
When the Senate will take up the bill is yet to be determined, but it is expected to pass the chamber and be signed into law by President Joe Biden.