In a surprising move, the House of Representatives voted on Wednesday night to pass a $78 billion tax package by a wide margin, with a final vote count of 357-70. This package includes an expansion of the child tax credit and has gained broad bipartisan support. However, despite this significant victory in the House, its future in the Senate remains uncertain.
While the bill has received support from both Democrats and Republicans, it has faced objections from opposing sides. Liberal Democrats expressed concerns over the proposed business tax breaks, while right-wing Republicans raised issues with the child tax credit policy. Additionally, members of the New York GOP complained that the bill does not expand the $10,000 cap on federal deductions for state and local taxes.
The tax package will now be presented to the Democratic-led Senate, where it requires a minimum of 60 votes to pass. However, it remains uncertain whether the bill will garner enough support. One prominent skeptic in the Senate is Chuck Grassley, a Republican member of the Finance Committee. Grassley openly stated his concerns about the bill, suggesting that it aims to make President Joe Biden “look good” in an election year.
Senate Majority Leader Chuck Schumer, a Democrat from New York, declined to provide a specific timeline for voting on the tax bill or whether any amendments would be made. However, he did express his support for the legislation and mentioned ongoing collaboration with Senator Ron Wyden, the chairman of the Finance Committee, on determining the best way forward.
The primary aim of the tax package is to provide relief to struggling families, particularly parents with multiple children. To achieve this, the bill proposes an expansion of refundable child tax credits. The current $1,600 refundable cap on the credit would be incrementally lifted and adjusted for inflation. Additionally, the legislation seeks to revive certain expired provisions from the 2017 Republican tax cuts for businesses, such as research and experimental expensing and small-business expensing.
House Ways and Means Committee Chairman Jason Smith, a Republican from Missouri, expressed his support for the tax package before the House vote. He described the bill as “pro-growth, pro-jobs, pro-American” and emphasized its potential benefits for parents in main street communities across the country. Smith believes that passing this legislation will lead to lower taxes, increased opportunities, and enhanced financial security for families.
Senate Minority Leader Mitch McConnell has deferred to Senator Mike Crapo of Idaho, the ranking member on the Finance Committee, to lead the Senate GOP response to the tax package. Crapo has expressed his desire for the bill to go through the committee stage, allowing for revisions and amendments from all members. One specific change he mentioned is the elimination of the provision allowing taxpayers to use a previous year’s income for larger child tax credits.
While Crapo highlights the need to address certain aspects of the bill, he refrained from discussing all other potential changes. It remains to be seen how the Senate GOP will approach the tax package, and the outcome will significantly impact its journey through the Senate.
With its passage in the House, the $78 billion tax package has established a significant foothold in the ongoing legislative process. However, its journey in the Senate remains uncertain, with potential roadblocks and differing opinions from both sides of the aisle. The coming weeks will reveal whether the bill can secure the necessary votes to become law, or if it will face further resistance, amendments, or potential stall tactics along the way. The fate of this controversial tax package now lies in the hands of the Senate.