$78 Billion Tax Package: A group of lawmakers from both political parties proposed a $78 billion tax package. The package aims to improve the child tax credit, restore certain business tax breaks, and increase funding for affordable housing and disaster relief.
Challenges to Passage:
- Despite bipartisan support, there are obstacles to passing the deal.
- Some Democrats want to restore part of the child tax credit from 2021, which reduced child poverty.
- Some Republicans and business interests want to reverse restrictions on companies’ tax deductions.
Negotiation and Pathway Through Congress:
- The deal wasn’t negotiated by the leadership, and its approval in Congress is uncertain.
- Lawmakers may try attaching it to a necessary bill for easier passage, but it might have to stand alone.
- Congress has a lot on its agenda, and achieving significant goals in an election year is challenging.
$78 Billion Tax Package Contents:
- The deal strengthens the child tax credit, but not as much as the 2021 American Rescue Plan Act did.
- It increases refundability for lower-income families, removes penalties for larger families, and adjusts for inflation starting in 2024.
- Businesses can immediately deduct the cost of their U.S.-based research and development investments.
- It provides tax relief for businesses and individuals affected by disasters like hurricanes, floods, wildfires, and the Ohio rail disaster.
- The Low-Income Housing Tax Credit is enhanced to increase the supply of affordable housing.
- The package speeds up the deadline for filing claims for the Employee Retention Tax Credit, saving taxpayers over $70 billion.
In summary, lawmakers are proposing a tax package to address various issues, including supporting families, businesses, disaster-affected areas, and affordable housing. However, its passage faces challenges, and the specific details of the package aim to balance different priorities.