The Bipartisan Tax Bill: Expanding the Child Tax Credit and Boosting US Manufacturing

The Bipartisan Tax Bill, passed by the House of Representatives on January 31, 2024, is a significant piece of legislation that aims to temporarily expand the child tax credit and revive a number of business tax breaks. This bill, which is broadly bipartisan, faced some opposition but ultimately gained wide support from both Democrats and Republicans.

The Child Tax Credit, which was expanded during the COVID-19 pandemic, has been a topic of debate in Congress. Efforts to make these changes permanent failed in the last Congress. However, the new tax bill includes provisions to temporarily increase the maximum refundable amount of the child tax credit from $1,600 to $2,000 for 2025. It also enhances child tax credit benefits for families with multiple children.

The bill also boosts American businesses’ ability to expense research and development costs if it’s conducted inside the U.S. This provision is aimed at incentivizing new U.S. manufacturing. The tax deal would provide relief to families and help keep the U.S. competitive against China.

The House GOP leaders opted to put up the bill under suspension of the rules, which bypasses a procedural hurdle known as a rule vote in exchange for raising the threshold for passage to two-thirds of the chamber rather than a simple majority. This move was necessary as rule votes have been weaponized several times during the 118th Congress by GOP factions who have deliberately sunk rule votes in protest of how Republican leaders are handling matters, even those unrelated to the legislation they’re voting on.

The tax bill would also include provisions to build affordable homes in rural communities, expand the child tax credit to help supplement the costs of raising a family, and lower taxes for hardworking Americans. It is important to note that the research and development provision allows businesses and corporations to write off everything related to research and development, effectively a tax break.

The bill now heads to the Senate, where Sen. Mike Crapo, R-Idaho, the top Republican on the Senate Finance Committee, previously called the bill a “starting point” in tax talks. The tax deal is expected to face further negotiations in the Senate before it can be passed into law.

In conclusion, the Bipartisan Tax Bill is an important piece of legislation that aims to provide relief to families and incentivize new U.S. manufacturing. It is a bipartisan bill that gained wide support from both Democrats and Republicans, despite some opposition. The bill now heads to the Senate for further negotiations before it can be passed into law.