WASHINGTON — Top lawmakers in Congress announced a bipartisan deal Tuesday to expand the child tax credit and provide a series of tax breaks for businesses.
House Ways and Means Chairman, R-Mo. and Senate Finance Chairman Ron Wyden, D-Ore. The $78 billion tax deal continues months of negotiations and common ground in a divided Congress.
“American families will benefit from this bipartisan agreement, which provides greater tax benefits, strengthens Main Street businesses, increases our competitiveness with China and creates jobs,” Smith said. “We even provide disaster relief and cut red tape for small businesses,” while ending a COVID-era program that has cost taxpayers billions in fraud.
The contract was the details This was previously reported by NBC News, will increase refundable child tax credits to help financially struggling families with many children. It would also lift the $1,600 refundable cap on the tax credit and adjust it for inflation.
The new child tax credit policy will benefit approximately 16 million children in low-income families analysis By the liberal Center on Budget and Policy Priorities. “The expansion will significantly reduce child poverty,” CBPP said. “In the first year, the expansion will lift up to 400,000 children above the poverty line. As their income approaches the poverty line, another 3 million children will fall into poverty.”
Democrats had called for a larger child tax credit after the previous version, which they passed less than a year after it expired, caused child poverty to drop and then rise again. The new deal will provide smaller benefits than monthly payments under the American Rescue Plan.
“Fifteen million children from low-income families will be better off as a result of this plan, and given today’s bleak political climate, having this opportunity to pass pro-family policies that help so many children get ahead is a big deal.” Wyden said in a statement.
Republicans were motivated in 2017 to revive some of the expired parts of Trump’s tax cuts for businesses. According to a section-by-section summary released by the Ways and Means Committee, the deal includes spending for research and experimental costs, restoration of the previous interest deduction, expansion of small business spending and extension of bonus depreciation.
Wyden said he hopes to pass the deal by the start of tax filing season on Jan. 29. Congress is not sure about other priorities, in particular. to avoid a government shutdown later this week and completes the funding process by March. If it passes, it would be a rare success story of proactive legislative work on a politically sensitive issue by a historically ineffective, divided Congress.
“My goal is to pass it in time for families and businesses to benefit this upcoming tax filing season, and I will pull out all the stops to do that,” Wyden said Tuesday.