The package also includes tax breaks to incentivize the construction of affordable rental units, relief for last year’s wildfires and train derailments, and takes the first steps to eliminate double taxation on companies and workers with ties to the United States and Taiwan.
Many of these provisions were part of Trump’s 2017 tax cuts, but they expired over the past few years. Since then, major business groups, such as the Business Roundtable, the Chamber of Commerce, and the National Association of Manufacturers, have lobbied lawmakers to reinstate these laws.
The package released earlier this week was the result of a rare bipartisan agreement between Republican House Speaker Jason Smith (Missouri) and Democratic Senate Finance Chairman Ron Wyden (Oregon).
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 the committee vote on Friday, the White House also expressed support for the legislation.
“It will lift hundreds of thousands of children out of poverty and support the 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 one we believe Congress should approve.”
It remains to be seen whether the White House’s endorsement helps win the support of Democrats in Congress. A number of influential Democrats raised concerns about the package after it was introduced earlier this week.
“It’s better that we do (the tax bill) than let all this stuff expire, but that doesn’t mean it’s right,” Rep. Earl Blumenauer, an Oregon Democrat, said on a “Ways and Means” vote on Friday. “That doesn’t mean we can’t do better.”
Ultimately, Blumenauer said he would “reluctantly” vote for the bill, but wants to see the child tax credit expanded further.
To pay for these measures, the package will end the pandemic-era tax break on January 31 for businesses with employees affected by Covid-19.
House Speaker Mike Johnson has not yet confirmed when or even whether he will bring the bill to the House floor for a vote. But Smith and Wyden hope to pass the measure as soon as possible, so that provisions in the bill can be applied to 2023 federal tax returns, due to be filed on April 15.