$78 Billion Tax Package: Child Tax Credit Boost, Business Relief

$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.

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$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.

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