House Overwhelmingly Passes Bipartisan Tax Bill, Enhancing Child Tax Credit
In a rare display of bipartisan cooperation, the U.S. House of Representatives voted decisively to approve a $78 billion tax package known as the Tax Relief for American Families and Workers Act of 2024. The centerpiece of this legislation is the significant expansion of the Child Tax Credit, a move aimed at providing relief to lower-income families. The bill, which passed by a resounding 357-70 margin, now advances to the Senate for further consideration.
The legislation, negotiated by House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR), marks a crucial step toward addressing the financial challenges faced by working families and bolstering economic growth. The bill garnered support from both sides of the aisle, with 188 Democrats and 169 Republicans voting in favor, reflecting a noteworthy bipartisan consensus.
The expanded Child Tax Credit seeks to make it easier for families to qualify, increasing the credit amount from $1,600 per child to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025. Furthermore, adjustments will be made to the limit in future years to account for inflation. Proponents argue that these changes could potentially lift at least half a million children out of poverty, as indicated by the Center on Budget and Policy Priorities.
Notably absent from the tax package is an increase in the cap on state and local tax (SALT) deductions, a matter of contention among lawmakers from high-tax states in the Northeast and California. The 2017 federal tax overhaul imposed a $10,000 cap on SALT deductions, affecting residents in these regions. While the bill addresses the Child Tax Credit and restores credits for affordable housing, the absence of SALT deduction increases has sparked discussions among legislators.
The tax package also revives some tax cuts for businesses, including research and development deductions, a provision introduced to secure Republican support. However, concerns have been raised by both conservative and progressive lawmakers. Some conservatives argue that the bill expands the welfare state, while certain Democrats express dissatisfaction with the limited restoration of expanded child tax credits, particularly for low-income households affected during the pandemic.
The fate of the tax measure in the Senate remains uncertain, despite the bipartisan collaboration that led to its passage in the House. Democratic Majority Leader Charles Schumer, a supporter of the proposal, has indicated ongoing efforts to navigate potential changes needed for Senate approval.
In conclusion, the House’s approval of the bipartisan tax bill, with a primary focus on enhancing the Child Tax Credit, reflects a noteworthy stride in addressing economic challenges faced by American families. As the bill advances to the Senate, its fate remains uncertain, and lawmakers will continue to navigate the complexities surrounding various provisions, including the eagerly anticipated expansion of the Child Tax Credit.