Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Jason Smith (R-Mo.) have announced a bipartisan tax framework that promotes working families’ financial security, increases growth and competitiveness, and strengthens communities and Main Street businesses.
Senate Finance Committee Chairman Ron Wyden (D-Ore.) stated,
American families will benefit from this agreement, which provides more tax relief, strengthens businesses, increases our competitiveness with China, and creates job opportunities.
Ways and Means Chairman Jason Smith (MO-08) added that American families will benefit from this bipartisan agreement, which provides more significant tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs. This legislation can lock in over $600 billion in proven pro-growth, pro-America tax policies with critical provisions that support over 21 million jobs.
The Plan: The Tax Relief for American Families and Workers Act of 2024.
- Help working families with an increased Child Tax Credit
- Increase innovation and competitiveness through pro-growth economic policies such as R&D expensing.
- Reduce red tape to improve Main Street and provide tax assistance to rebuild disaster-affected towns.
- Expand the Low-Income Housing Tax Credit.
- End the Employee Retention Tax Credit program, therefore eliminating fraud and waste.
Lets look at these in a bit more detail.
- Increase access to the child tax credit with a progressive increase in the refundable component for 2023, 2024, and 2025.
- Eliminate the penalty for more prominent families: Ensure that the child tax credit phase-in is administered evenly to households with numerous children.
- One-year income lookback: Allow taxpayers to compute the child tax credit using current or prior-year income in 2024 or 2025, similar to bipartisan action taken six times in the previous 15 years.
- Inflation relief: Beginning in 2024, the tax credit will be adjusted to reflect inflation.
- Research and Development (R&D) expensing allows firms of all sizes to immediately deduct the cost of their R&D expenditures rather than waiting five years, promoting American innovation and enhancing our competitive position against China and the rest of the world.
- Interest deductibility: Continued flexibility for firms that borrow at higher interest rates to satisfy payroll obligations and expand operations.
- 100% expensing: Restore complete and prompt expensing for machinery, equipment, and vehicle expenditures.
Taiwan double tax relief: Strengthen America’s competitive position against China by eliminating the present double taxation for enterprises and personnel having operations in both the United States and Taiwan.
- Expand the small company expensing ceiling: Increase the investment that a small firm may immediately write off to $1.29 million, up from the $1 million maximum set in 2017.
- Reduce red tape for small firms by increasing the reporting threshold for enterprises that utilize subcontract labor from $600 to $1,000 and indexing for inflation, the first change since the 1950s.
Help households get back on their feet by providing catastrophe tax assistance for recent storms, flooding, wildfires, and the Ohio train disaster.
Increase the availability of low-income housing by expanding the Low-Income Housing Tax Credit, a successful public-private collaboration with more significant state allocations and a lower tax-exempt bond financing threshold.
Saving approximately $70 billion in public cash by extending the deadline for filing backdated claims under the COVID-era Employee Retention Tax Credit to January 31, 2024, a program plagued with cost overruns and fraud.
- Increase access to the child tax credit with a progressive increase in the refundable component for 2023, 2024, and 2025.
- Eliminate the penalty for more prominent families: Ensure that the child tax credit phase-in is administered evenly to households with numerous children.
- One-year income lookback: Allow taxpayers to compute the child tax credit using current or prior-year income in 2024 or 2025, similar to bipartisan action taken six times in the previous 15 years.
- Inflation relief: Beginning in 2024, the tax credit will be adjusted to reflect inflation.
- Research and Development (R&D) expensing allows firms of all sizes to immediately deduct the cost of their R&D expenditures rather than waiting five years, promoting American innovation and enhancing our competitive position against China and the rest of the world.
- Interest deductibility: Continued flexibility for firms that borrow at higher interest rates to satisfy payroll obligations and expand operations.
- 100% expensing: Restore complete and prompt expensing for machinery, equipment, and vehicle expenditures.
Taiwan double tax relief: Strengthen America’s competitive position against China by eliminating the present double taxation for enterprises and personnel having operations in both the United States and Taiwan.
- Expand the small company expensing ceiling: Increase the investment that a small firm may immediately write off to $1.29 million, up from the $1 million maximum set in 2017.
- Reduce red tape for small firms by increasing the reporting threshold for enterprises that utilize subcontract labor from $600 to $1,000 and indexing for inflation, the first change since the 1950s.
- Help households get back on their feet by providing catastrophe tax assistance for recent storms, flooding, wildfires, and the Ohio train disaster.
- Increase the availability of low-income housing by expanding the Low-Income Housing Tax Credit, a successful public-private collaboration with more significant state allocations and a lower tax-exempt bond financing threshold.
- Saving approximately $70 billion in public cash by extending the deadline for filing backdated claims under the COVID-era Employee Retention Tax Credit to January 31, 2024, a program plagued with cost overruns and fraud.