Senior members of both parties have announced an agreement to renew some tax breaks that expired during the Trump era for businesses, and to expand the child credit.
Jason Smith, the House Ways and Means chair (R-Mo.) announced that a $78 billion tax agreement had been reached. Senate Finance Chair Ron Wyden, D-Ore. It is still necessary to write the bill and secure the votes to pass it. However, the fact that the two parties were able to reach an agreement at all in Washington is impressive.
Smith stated in a press release that “American families will be able to benefit from this bipartisan deal, which provides greater tax relief and strengthens Main Street business, while also boosting our competitiveness against China. It creates jobs.”
Wyden said, “Fifteen million kids from low-income households will benefit as a result. And given the current political climate that is so miserable, it’s an important opportunity to pass a pro-family policy which helps so many children get ahead.”
Joe Biden has already started to plan how he will blow it up. Biden is “committed to fighting for full expanded Child Tax Credit”, which he fought as part of 2021’s “American Rescue Plan”. Republicans considered it ruinously expensive.
For children aged 6-17, the full credit amount is $3,000 and for those under 6 years old, it’s $3600. The cost is $1.6 trillion for the next 10 years. The partial credit would cost less, but still be around $700 billion in 10 years.
The details of the deal were first reported by NBC News. It would increase refundable child tax credits to help families who are financially struggling and those with more children. The deal would also increase the $1,600 cap on refundable tax credits and adjust them for inflation.
Tax breaks for businesses are modest.
Republicans wanted to bring back some of the expired Trump tax cuts from 2017. According to a summary of the deal, it includes depreciation for research and experimentation costs, restoration of a previous interest deduction, expansion of small business expensing, and extension of bonus tax.
In a statement, Sen. Mike Crapo, the top Republican of the Finance Committee and the chairman of the Finance Committee in the Senate said: “The agreement announced by Chairman Smith today is a thoughtful start for the House to initiate the process.” “I will work with my Senate colleagues to gain broad bipartisan support for an appropriate tax package for businesses and working families.”
The left complains about “tax breaks” for the wealthy, while the right complains about yet another massive expenditure that the government cannot afford. After the bill has been written and submitted, we’ll know what will happen.