Smiley face
Weather     Live Markets

Tax Notes Capitol Hill reporters Cady Stanton and Doug Sword discuss the challenges the Tax Relief for American Families and Workers Act is facing in the Senate. The $79 billion bill includes provisions such as an expansion of the child tax credit for lower-income households and a retroactive extension of tax breaks from the Tax Cuts and Jobs Act.

Since the House passed the bill with bipartisan support, it has faced obstacles in the Senate. Senate Finance ranking member Mike Crapo has raised concerns about the child tax credit provisions, leading to a standoff with Senate Finance Chair Ron Wyden and House Ways and Means Chair Jason Smith. The Republicans are seeking changes to the bill, including the income lookback provision and identification number requirements for children.

Senate Republicans, including Crapo, have voiced various issues with the bill, such as the retroactivity of the business tax breaks and a provision affecting the employee retention credit. They also want the opportunity to propose amendments to the bill, which could open the door to additional changes from both sides of the aisle. However, allowing amendments could complicate the bill’s passage, as Democrats may push for further expansions to the child tax credit.

Aside from specific issues with the bill, Congress’s focus on passing a spending bill and election-year politics are contributing to the delay. Both parties are seeking credit for legislative wins and may be hesitant to compromise. Additionally, procedural constraints and upcoming breaks in the congressional calendar are limiting opportunities for the bill to advance in the Senate.

Key figures involved in the negotiations, such as Wyden, Crapo, and Smith, have expressed varying levels of optimism and frustration regarding the bill’s progress. Despite efforts to address Senate Republicans’ concerns, negotiations have reached an impasse, with no clear path forward. The possibility of the bill reaching the Senate floor in the near future seems unlikely, given the competing priorities and limited legislative calendar.

While the April 15 tax season deadline is approaching, the bill may not necessarily fail if it misses this deadline. The IRS can make changes to the child tax credit without requiring amended returns, and businesses typically file for extensions. The possibility of delaying the bill until 2025 has been raised, with Republicans considering the potential benefits of waiting until after the 2024 elections to pursue a broader tax reform agenda. However, there are differences among Senate Republicans on whether postponing the bill is intentional or necessary.

Share.
© 2024 Globe Echo. All Rights Reserved.