House Approves Bipartisan Bill Expanding Child Tax Credit and Business Tax Breaks
The House of Representatives has passed a comprehensive tax bill with strong bipartisan support, aiming to enhance the child tax credit and reinstate select business tax cuts. Garnering a vote of 357-70, the bill was negotiated by key figures from both parties: Rep. Jason Smith (R-Mo.) and Sen. Ron Wyden (D-Ore.).
Utilizing the "suspension" fast-track method, the bill required a two-thirds majority in the Republican-led House, highlighting its significant cross-party appeal. However, its journey in the Senate remains uncertain, with some Republicans, like Sen. Mike Crapo (R-Idaho), seeking further adjustments.
Key Provisions of the Bill:
Child Tax Credit: The bill proposes to increase the child tax credit to $1,800 per child in 2023, $1,900 in 2024, and $2,000 in 2025, with adjustments for inflation in the latter two years.
Support for Disaster-Affected Individuals and Housing: It introduces tax benefits for those impacted by natural disasters and strengthens the low-income housing tax credit.
Business Tax Breaks: The legislation aims to extend tax breaks for businesses through 2025 and promote trade with Taiwan.
Funding: To finance these changes, the bill plans to eliminate the employee retention tax credit, a pandemic-era measure now considered susceptible to fraud.
Opposition and Concerns:
Conservative Republicans oppose the expanded child tax credit, mistakenly believing it benefits undocumented immigrants. However, the credit only applies to children with social security numbers.
Progressive Democrats argue the bill falls short in expanding the tax credit and disproportionately favors corporations.
Moderate New York Republicans raised initial concerns over the absence of reforms for a state and local tax deduction but were placated by promises of future discussions from Republican leaders.
The bill's passage in the House sets the stage for a challenging debate in the Senate, where differences within and between parties will play a crucial role in determining its fate. The legislation's impact spans various sectors, from families with children to businesses and individuals affected by natural disasters, making it a significant piece of potential policy change.
