A worker clears snow from the Senate steps at the U.S. Capitol January 16, 2024 in Washington, DC.
- A $78 billion tax package with major benefits for companies took a significant step towards becoming law.
- The package includes allowing the immediate expensing of research and development costs, and allowing machines, equipment, and vehicles to be fully and immediately expensed.
- The bill also expands the child tax credit by adjusting it for inflation and allowing Americans who don't have a tax bill to get the credit as a refund.
WASHINGTON — A $78 billion tax package with major benefits for companies took a significant step towards becoming law on Friday, when a key House panel overwhelmingly approved the bill by a vote of 40-3.
The strong bipartisan showing in the House Ways and Means Committee adds more momentum to the proposed changes, which include allowing the immediate expensing of research and development costs, allowing machines, equipment, and vehicles to be fully and immediately expensed and increased flexibility for businesses through interest deductions.
The package also includes tax credits to incentivize the building of affordable rental units, disaster relief for wildfires and train derailments that occurred last year, and it takes the first steps to remove double taxation for business and workers with ties to the U.S. and Taiwan.
Several of these provisions were part of the 2017 Trump tax cuts, but they expired over the last several years. Since then, major business groups like the Business Roundtable, Chamber of Commerce and the National Association of Manufacturers have lobbied lawmakers to reinstate them.
The package released earlier this week was the result of a rare, bipartisan agreement between Republican House Ways and Means Chair Jason Smith (Mo.) and Democratic Senate Finance Chair Ron Wyden (Ore.).
Money Report
To help win more Democratic support, the bill also expands the child tax credit by adjusting it for inflation and allowing Americans who don't have a tax bill to get the credit as a refund, among other changes.
In addition to Friday's committee vote, the White House also came out in support of the legislation.
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"It's going to lift hundreds of thousands of children out of poverty and support construction of hundreds of thousands of affordable rental housing units," said White House press secretary Karine Jean-Pierre. "It is a welcome step forward and we believe Congress should pass it."
Whether the White House's endorsement helps to win over congressional Democrats remains to be seen. A number of influential Democrats raised concerns about the package after it was introduced earlier this week.
"We're better doing [the tax bill] than letting all this stuff lapse, but that doesn't mean that it's right," said Rep. Earl Blumenauer, an Oregon Democrat, at Friday's Ways and Means vote. "That doesn't mean that we can't do better."
In the end, Blumenauer said he would "reluctantly" vote for the bill, but wanted to see the child tax credit expanded further.
To pay for the measures, the package would end a pandemic-era tax credit on Jan. 31, for businesses with employees impacted by Covid-19.
House Speaker Mike Johnson had yet to confirm when, or even if, he would bring the bill to the House floor for a vote. But Smith and Wyden are hoping to get the measure passed as soon as possible, so provisions in the bill can apply to 2023 federal tax filings, due April 15.
