February 2, 2024
The House passed a $78 billion tax bill on Wednesday, January 31, which boosts the child tax credit and reinstates business deductions that were rescinded during the Trump Administration—sending the bipartisan, bicameral legislation to the Senate for consideration, reports The Hill.
The chamber cleared the measure, dubbed the Tax Relief for American Families and Workers Act (H.R. 7024), in an overwhelmingly bipartisan 357-70 vote.
Passage of the legislation—which was crafted by House Ways and Means Committee Chair Jason Smith (R-Missouri) and Senate Finance Committee Chair Ron Wyden (D-Oregon)—marks a rare show of bipartisanship in this Congress, which has been defined by bitter partisan clashes and labeled as highly unproductive.
“The numbers speak for [themselves], [showing] that when you’re trying to deliver for the American people, people will join together and that’s what we saw today,” Smith told reporters after the vote, walking into an office with cheering staffers.
It is also one of the few instances this session when a nonessential bill—legislation that is not required to keep the government running—has a chance of being enacted. Senate Majority Leader Chuck Schumer (D-New York) on Wednesday said he is supportive of the tax bill and is working with Wyden “to figure out the best way forward.”
But approval was not unanimous: Conservative Republicans, Progressive Democrats, and some Moderate New York Republicans expressed opposition to the bill—racking up some “no” votes. The resistance from the Empire State lawmakers—furious that the legislation did not include an increase in the state and local tax (SALT) deduction—sparked a near-revolt on the House floor on Tuesday, a sign of the anger among the group.
In terms of the actual provisions of the legislation, the bipartisan, bicameral tax bill would beef up the child tax credit by increasing the maximum credit per child from $1,600 to $2,000 through 2025, adjusting for inflation in 2024 and 2025.
Additionally, it calls for raising the ceiling for the low-income housing tax credit by 12.5% through 2025, lowering the threshold for bond-financed buildings to receive the low-income housing tax credit.
The measure also reinstates three business deductions that were nixed in the 2017 Tax Cuts and Jobs Act—which was the most significant legislative achievement of the Trump Administration—including allowing businesses to deduct research and development costs every year instead of over a five-year period.
The bill also would create a carve-out for Taiwanese companies to prevent double taxation for businesses that have workers in the United States and Taiwan; and it would give tax relief to victims of wildfires and those affected by the Norfolk Southern train derailment in East Palestine, Ohio—allowing for any disaster relief payments to not count toward their taxable income.
Research contact: @thehill
