Congress unveils bipartisan tax deal ahead of shutdown deadline
Top lawmakers on the congressional tax-writing committees unveiled a $78 billion, bipartisan tax agreement on Tuesday to extend multiple tax breaks.
Why it matters: The proposed deal would expire in 2025, teeing up a major tax battle for the next Congress after the 2024 elections.
- The tax package faces an uphill battle in the House, where Republicans have a tiny majority.
- The bill would likely have to sidestep a procedural vote requiring a 2/3 majority in the lower chamber.
Zoom in: Senate Finance Committee Chair Ron Wyden (D-Ore.) and House Ways and Means Chair Jason Smith (R-Mo.) unveiled the Tax Relief for American Families and Workers Act of 2024 on Tuesday.
- The deal would expand the Child Tax Credit, in part, by incrementally increasing the refundable portion of the child tax credit so that lower-income families who don't owe income taxes would still get a credit.
- It alters research & development (R&D) expensing for businesses to allow for immediate expensing, restoring interest deductions and "removing the current double taxation that exists for businesses and workers with a footprint in both the United States and Taiwan."
- The package would end the Employee Retention Tax Credit Program.
- It also increases the Low-Income Housing Tax Credit, which provides tax incentives for providing rental housing for lower-income people.
What they're saying: Wyden and Smith touted the package as a step in the right direction for job creation and upward mobility for families in the U.S.
- American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs," Smith said in a statement.
- Wyden added that "fifteen 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."
- "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. 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," Wyden said.
The big picture: Congress is struggling to pass legislation to avoid a government shutdown and faces the start of an election year.
- Conservatives have been at odds with leadership over government funding levels calling for cuts, with a revenue-cutting bill potentially facing pushback from some within the Congress.