NBC News reports that senior lawmakers in Congress, led by House Ways and Means Chair Jason Smith (R-Mo.) and Senate Finance Chair Ron Wyden (D-Ore.), announced a $78 billion bipartisan tax agreement on Tuesday.
The deal aims to expand the child tax credit and introduces a series of tax breaks for businesses, addressing key priorities for both parties.
Child Tax Credit Expansion
The bipartisan agreement targets the child tax credit, proposing significant enhancements to provide relief to financially struggling families and those with multiple children. Among its key provisions, the deal eliminates the $1,600 refundable cap and adjusts the credit for inflation.
According to an analysis by the Center on Budget and Policy Priorities, approximately 16 million kids in low-income families stand to benefit from this new child tax credit policy.
“The expansion would meaningfully reduce child poverty,” stated the CBPP, adding that, in the first year alone, the expansion could lift up to 400,000 children above the poverty line. A total of 3 million more children would see their incomes rise closer to the poverty line.
Business Breaks Revival
Republicans, in particular, are motivated by the deal’s inclusion of provisions to revive certain expired portions of the 2017 Trump tax cuts for businesses.
The comprehensive agreement covers expensing for research and experimental costs, restoration of an earlier interest deduction, an expansion of small-business expensing, and an extension of bonus depreciation.
Sen. Mike Crapo (R-Idaho), the top Republican on the Finance Committee, expressed support for the agreement, stating, “The agreement announced today by Chairman Smith and Chairman Wyden is a thoughtful starting point for the House to begin the process.”
Legislative Hurdles and Optimism
While the deal represents a significant bipartisan achievement, it faces the challenge of being written into legislation and securing votes in the Republican-led House and Democratic-led Senate. The tax writers are optimistic about swift approval, aiming to pass it before the upcoming tax filing season, starting Jan. 29.
Wyden emphasized his goal to pass the deal swiftly, acknowledging the pressing priorities Congress faces, including averting a government shutdown and completing funding processes by March.
Whether the tax deal will be presented as a standalone bill or attached to a government funding measure remains unclear.
If successful, this tax deal would stand out as a rare accomplishment in the current politically sensitive and historically unproductive landscape of a divided Congress.
What are your thoughts? How will the proposed tax deal impact the financial landscape for American families and businesses?
Can this bipartisan agreement truly provide meaningful relief to struggling families and promote economic growth? Will the adjusted child tax credit policies effectively address child poverty, as claimed by lawmakers?
