The House passed a tax bill on Wednesday that boosts the child tax credit and reinstates business deductions that were rescinded during the Trump administration, sending the bipartisan, bicameral legislation to the Senate for consideration.
The chamber cleared the measure, dubbed the Tax Relief for American Families and Workers Act, in an overwhelmingly bipartisan 357-70 vote.
Passage of the legislation — which was crafted by House Ways and Means Committee Chair Jason Smith (R-Mo.) and Senate Finance Committee Chair Ron Wyden (D-Ore.) — marks a rare show of bipartisanship in this Congress, which has been defined by bitter partisan clashes and labeled as highly unproductive.
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-N.Y.) 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 and progressive Democrats both expressed opposition to the bill, racking up some “no” votes.
Hard-line GOP lawmakers, for starters, took aim at the expanded child tax credit, arguing that the provision would grow the “welfare state.” They also claimed that the legislation would allow families with immigrants in the country illegally to continue receiving the benefits — even though the provision is in line with the 2017 tax bill enacted during the Trump administration that requires children to have Social Security numbers in order for their parents to receive the benefits.
“Unfortunately, as happens in this town, this legislation comes with provisions that, frankly, the people I represent are tired of,” Rep. Chip Roy (R-Texas), a member of the conservative House Freedom Caucus, said on the House floor Wednesday.
“And it’s provisions that would continue to expand the welfare state, as ‘The Wall Street Journal’ editorialized about, by expanding the child tax credit in ways that will continue to fund people directly through refundable credits which we find to be problematic, and we think undermines the kind of economic activity and incentive to work and incentive to, you know, produce value that we think is critically important for economic growth,” he added.
They were also frustrated that GOP leadership brought the bill to the floor under suspension of the rules, a fast-track process that requires two-thirds support for passage but also avoids having to first pass a rule, which Republican opponents of the bill may have tanked.
Progressive Democrats, meanwhile, argued that the legislation favored corporations over those eligible for a child tax credit. Rep. Rosa DeLauro (D-Conn.), the ranking member of the House Appropriations Committee, bemoaned the “inequity” between the corporate benefits and those delivered to families under the child tax credit.
Corporations, she said, will get the benefits “immediately,” while “we have to phase in on the child tax credit.”
“There is inequity. They have moved in the direction of saying to the biggest corporations, ‘You get everything you want and more,’” she told reporters in the Capitol on Tuesday. “The child tax credit is a proven entity. Normally what [corporations] have done is to purchase stock options, they buy back.”
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 percent 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.
It would also create a carve-out for Taiwanese companies to prevent double taxation for businesses that have workers in the U.S. 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.
Mike Lillis contributed.
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