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WASHINGTON — Leading members of Congress unveiled a bipartisan bicameral tax plan Tuesday, promising a centrist deal to help low-income households and incentivize businesses as Trump-era tax cuts expire. .
Led by top tax policy leaders, Democratic Sen. Ron Wyden of Oregon and Republican Rep. Jason Smith of Missouri, the framework would gradually increase the child tax credit until 2025, making it more affordable. It would reinstate tax breaks for affordable housing projects.
The three-year proposal would also waive disaster compensation payments for wildfire victims and those who suffered losses from the massive train derailment in East Palestine, Ohio. The agreement also aims to expand research and development tax credits and reduce the tax burden on U.S.-Taiwan business relations, an effort to strengthen ties with the autonomous island nation vulnerable to Beijing’s aggression. ing.
“One million children in low-income families will be better off as a result of this plan, and given today’s dire political climate, this is a huge deal,” Senate Finance Committee Chairman Wyden said in a statement. That’s true.” Seize this opportunity to pass pro-family policies that will help so many children get ahead. ”
Democrats are pushing for a permanent increase in the tax credit that low-income families receive per child after a temporary increase during the coronavirus pandemic showed a significant reduction in child poverty. We have been promoting it. The current proposal is scheduled to end in 2025.
Wyden also praised the deal’s potential to spur affordable housing construction and said his goal is to “finish this deal in a timely manner so that families and businesses can benefit this coming tax filing season.” There is no change in passing the bill, and I will do everything in my power to make that happen.” that’s finished. ”
“American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, increases competitiveness with China, and creates jobs,” said House Ways and Means Committee Chairman Smith. He will receive it.”
Terminating programs with rampant cheating
The two lawmakers said the proposal seeks to curb abuse of the COVID-19 employee retention tax credit by increasing penalties and statutes of limitations for those committing fraud and shortening the overall program by 14 months. He emphasized the efforts of
“We will end coronavirus-era programs that cost taxpayers billions of dollars in fraudulent losses, while also providing disaster relief and cutting red tape for small businesses. This legislation locks in more than $600 billion in a proven, pro-growth, pro-American tax policy with important provisions that support more than 21 million jobs. My colleagues helped pass this bill. We look forward to working with them,” Smith continued in a statement Tuesday.
And for those filing 1099 forms, a provision included in the framework would increase the filing threshold from the current $600 to $1,000.
The proposal drew praise from all corners of tax policy.
The Business Roundtable, an advocacy group representing a wide range of U.S. CEOs, said the deal’s pitch for reinstating expired pro-business policies is “crucial to strengthening America’s global competitiveness.” Stated.
“The Business Roundtable is committed to the bipartisan commitment to reinstate three important pro-growth tax programs that have expired or are being phased out,” Joshua Bolten, the group’s CEO, said in a statement Tuesday. I strongly support the agreement.” “Reviving immediate research and development spending, fully paying for equipment, machinery, and technology purchases, and more prudent business interest deductions would increase domestic investment, foster American innovation, and create American jobs.” It will be done.”
Sen. Sherrod Brown, an Ohio Democrat and child tax credit evangelist, called the deal “a win-win for Ohio families and Ohio manufacturers,” and urged his colleagues to agree to the deal. urged its approval.
“This agreement’s expansion of the child tax credit will help parents cope with the rising cost of living and ensure that their efforts are rewarded. This business provision will support American companies that invest in our nation’s research and manufacturing. “This agreement will also ensure that East Palestine residents will not be hit with a surprise tax bill for payments they received from Norfolk Southern after last year’s derailment,” it said in a statement Tuesday.
The Committee for a Responsible Federal Budget congratulated lawmakers on reaching a long-sought agreement that will largely pay for the fight against the misuse of coronavirus funds.
But the group, which advocates for reducing the nation’s debt, says the provision, if made permanent, could cost far too much in the long run, potentially more than $5 billion over 10 years. I warned you that there is.
“As our debt approaches record levels, it is critical that new policies are fully offset. Chairman Smith and Chairman Wyden have worked extremely hard to find offsets for this policy. CRFB should be commended for its efforts, which will help codify the principle that all policies, including tax cut extensions, must be paid for to avoid increasing debt.” said Maya McGuineas, president of the in a statement Tuesday.
McGuineas then went on to say that lawmakers “need to end the practice of passing temporary tax and spending policies with arbitrary deadlines that exist solely to hide the true costs.” Policymakers are already facing nearly $4 trillion in insurance policies expiring at the end of 2025, and this package will significantly increase those costs.
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