On Friday, a proposed deal to cut taxes for businesses and increase the Child Tax Credit (CTC) passed the House Ways and Means Committee with broad bipartisan support.
The tax deal advanced with 40 votes in favor and only 3 votes against.
According to the Joint Committee on Taxation (JCT), the total reductions over the 10-year budget period will be between $262 million and $399 million, adjusted slightly by last-minute replacement amendments to the $79 billion tax bill. became.
The cost of this proposal ($33 billion for CTC expansion and another $33 billion for business interruption) is almost exactly offset by the $77 billion increase in revenue achieved by revoking the Employee Retention Tax Credit (ERC) .
During Friday's hike in the bill, Democrats expressed frustration that it did not include an expanded Child Tax Credit that lifted millions of children out of poverty when it was increased and made fully refundable after the pandemic. did.
An amendment proposed by Democrats to further increase the CTC by making it fully refundable and payable in monthly payments was rejected by the committee.
“The Child Tax Credit, or CTC policy, written into this bill is not reaching the families who need it most,” Rep. Susan DelBene (D-Wash.), who proposed one of the amendments, said at the hearing. I mentioned it at the meeting. “A person who earns the federal minimum wage and works full time; [making] At about $15,000 a year, you don't earn enough to receive the full credit. ”
Still, key Democrats voted in favor of the plan, including powerful Reps. Richard Neal (D-Mass.) and Bill Pascrell (D.N.J.). Only Representatives Lloyd Doggett (D-Texas), Linda Sanchez (D-Calif.), and Blake Moore (R-Utah) voted against it.
The bill is revenue-neutral and includes $33 billion in deductions for research and other business expenses, but Republicans proudly claim that the deal will result in even greater benefits for businesses. .
“This law locks up more than $600 billion “It's a proven, pro-growth, pro-American tax policy with important provisions that will support more than 21 million jobs,” Ways and Means Committee Chairman Jason Smith (R-Missouri) said in the agreement earlier this week. This was stated in a statement issued at the same time as the announcement.
Some analysts say this is why the nominal equivalence in law between corporate credit and CTC expansion is not accurate in practice.
Joe Hughes, a federal policy expert at the Institute on Taxation and Economic Policy, told The Hill that the $600 billion figure stems from the possibility that Republicans will try to extend the bill beyond its current expiration date in 2025. Told.
“This highlights one of the complexities that CTC proponents faced while negotiating the dollar-for-dollar agreement. Two of the business provisions relate to the timing of tax payments, so Of course, proponents of these provisions argue that these “[t]he provisions were never intended to truly lapse,'' he wrote in his analysis.
The White House on Friday urged Congress to pass the bill, saying it was pleased with the progress on the bill and the fact that the deal was paid for.
“We are pleased that the House Ways and Means Committee has advanced a bipartisan tax bill that increases the child tax credit for millions of families,” a White House spokesperson told The Hill in a statement.
“As the president continues his fight to fully restore the child tax credit that has helped cut child poverty in half, this bipartisan tax bill is a welcome step forward and must be passed by Congress,” the spokesperson said. he added.
The deal's future is uncertain in the Republican-controlled House, where House Speaker Mike Johnson (R-Louisiana) has not yet considered the bill. Johnson is also facing pressure from conservative hardliners over government funding and border security ahead of a potential government shutdown on March 1, which could complicate the bill's passage through the House of Commons. There is.
Senate Minority Leader Chuck Schumer of New York supports the tax plan, which would need 60 votes to pass the Senate.
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