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WASHINGTON — The U.S. House of Representatives on Wednesday overwhelmingly approved a $78 billion tax bill that expands the child tax credit and restores tax breaks for businesses.
The 357-70 vote sent the bill, called the American Families and Workers Tax Relief Act of 2024, to the U.S. Senate, where lawmakers are expected to vote on it at some point, but passage is not guaranteed.
House debate on the 84-page bill was largely bipartisan, with House Tax Law Chairman Rep. Jason Smith, R-Missouri, and his Senate counterpart, Finance Chairman Ron Wyden, D-Ore. ) was supported by both Democrats and Republicans. .
Lawmakers from both political parties also opposed the bill, with several far-right lawmakers arguing that expanding the child tax credit would expand the scope of the “welfare state,” and progressive Democrats saying the bill would provide relief to low-income families. claimed there was not enough to do so. income and working households.
“All of these policies will help America do business, help growth, help create jobs, and make America more competitive against China,” Smith said.
He said the child tax credit expansion continues a provision that Republicans included in the 2017 tax law passed during the Trump administration, but updates some of the language.
“We will maintain work requirements, expand benefits to help families overwhelmed by today’s inflation, and eliminate penalties for families with multiple children,” Smith said.
Massachusetts Rep. Richard Neal, the top Democrat on the tax planning committee, said expanding the child tax credit would immediately help 16 million children nationwide.
“This is not the bill I wanted to write, but it’s smart policy,” he said of the overall package.
Neal voiced his opposition to the bill during floor debate, harshly criticizing far-right Republicans who called CTC “welfare.”
“I can’t believe we’re standing here tonight and hearing that addressing child poverty is about welfare,” Neal said.
Immigration and child tax credit
Freedom Caucus Chairs Bob Good (Virginia), Matt Gaetz (Florida), Thomas Massey (Kentucky), Scott Perry (Pennsylvania), Chip Roy (Texas) and others participated in the floor debate. He was one of the Republicans who opposed the bill’s passage.
All expressed frustration that child tax credit payments could be applied to undocumented immigrants, even though a provision in the 2017 Republican tax law requires children to have a Social Security number. Others criticized the tax credits for businesses as well.
“Little kids can’t have a check sent to them, even if they have a Social Security number. But their parents who are in the country illegally do,” Perry said.
Georgia Republican Rep. Drew Ferguson vehemently rejected the criticism, saying he was not concerned “at all about American companies becoming more competitive on the world stage.”
“This is not about giving tax breaks to businesses, this is about investing in America and American jobs,” Ferguson said. “And the complete misunderstanding about the child tax credit is the most intellectually dishonest conversation I’ve heard in this chamber in a long time.”
“This is about ensuring working people and their families have the ability to move forward,” Ferguson added.
Rep. Rosa DeLauro, D-Conn., one of the House’s most progressive members and a longtime CTC supporter, said the bill “makes a mockery of who our government representatives work for.” He said he could not support this bill.
“We cannot vote for a deal that disproportionately benefits big corporations while not ensuring deep tax cuts for the middle and working classes,” DeLauro said. “This deal is unfair at a time when inequality is on the rise.”
If Congress passes the bill, President Joe Biden will likely sign it.
White House press secretary Karine Jean-Pierre said in mid-January that the bill was a “welcome step forward.”
“And we believe Congress should pass this bill,” she said.
What does the child tax credit include?
The bill would expand the current child tax credit of up to $1,600 per child to up to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025; It will expire.
The three-year expansion of the child tax credit would fall short of the levels approved by Congress during the COVID-19 pandemic, which amounted to up to $3,000 or $3,600 for children under 6.
The bill includes several tax benefits for companies, including a provision that allows companies to immediately deduct research and development investments made in the United States.
According to the bill’s summary, the bill would “strengthen the competitive position of the United States vis-à-vis China by eliminating the current double taxation that exists for businesses and workers based in both the United States and Taiwan.” It is said that it is a thing.
The bill would help make housing more affordable through enhanced low-income housing tax credits and other provisions.
Parts of the bill are aimed at helping communities recover from natural disasters, including tax relief for families affected by hurricanes, wildfires, flooding, and a train derailment in East Palestine, Ohio. There is.
The bill would be paid for by ending a tax break known as the Employee Retention Tax Credit for businesses that retained employees during the coronavirus pandemic. The legislation would prevent companies from filing new claims on January 31, 2025, instead of April 15.
The House Ways and Means Committee voted 40-3 in mid-January to send the bill to the floor.
“Children who need diapers and shoes”
Senate Majority Leader Chuck Schumer, D-N.Y., said Wednesday he supports the tax bill and will consider when and how to bring it to a vote.
Wyden, chairman of the Senate tax committee, said he would talk to Schumer about whether to vote on amendments to the bill. But he said he wanted it to be voted on “as soon as possible.”
Wyden also rejected some criticism that the bill does not include a significant expansion of the child tax credit, which would last for three years, after which Congress would have to renegotiate tax policy. he pointed out.
“We have kids who need diapers and shoes, and we’re paying for essential goods (and) small businesses that are trying to compete with China,” Wyden said. “You have to say, ‘Just do it.’ ‘Get it done.'”
West Virginia Republican Sen. Shelley Moore Capito said she wants the Finance Committee to issue the increase before the bill goes to the Senate floor.
“I think we need to move it through the Treasury and have a revision process without pre-determining everything,” Capito said. “That’s what bothers people when they try to make policy. They don’t have the opportunity to consult. That’s why I’m all for the committee process. Bring it to the committee and get it passed. Sho.”
Sen. Thom Tillis, R-North Carolina, said he had several concerns with the bill, including that it was “not comprehensive enough.” He said he expected leaders to bring the amendment to a vote on the floor.
“I’ve always said that’s a mistake. I also think the reward is a sham,” Tillis said. “So this is a program that we didn’t pay for when we had the coronavirus relief bill, and now we’re looking at paying for it. And a lot of it is actually cracking down on fraud and abuse. .”
“Here’s the concept: Why not send it back to the Treasury and start plugging the $34 trillion hole that we have,” Tillis said of the national debt.
Indiana Republican Sen. Todd Young said he and Sen. Mike Crapo, the top Republican on the Tax Law Committee, hope to make the changes once the bill is on the floor.
“We still want to see improvements,” Young said, declining to elaborate on what changes he would like to make to the tax system. “I’m not going to elaborate.”
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