Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

Senate Republicans Stymie $78B Tax Package That Would Have Aided Businesses and Low-Income Families

By:
Ruth Singleton
Published Date:
Aug 2, 2024

GettyImages-1324617091-Capitol-Congress

On Aug. 1, Senate Republicans blocked a $78 billion bill that included tax breaks for businesses and low-income families, Accounting Today reported. The vote was 48-44. Democrats needed 60 votes in order to overcome a filibuster to keep the Senate from considering the bill.

The bill would have revived several tax breaks, including a scaled-back version of the enhanced Child Tax Credit. Specifically, it would have allowed more of the $2,000 per child tax credit to be paid to individuals with income so low that they now only qualify for part of the credit. It would also have boosted payments to low-income filers with more than one child. The maximum credit for all parents would have been indexed to inflation for two years starting in 2024.

The bill would have also revived the ability to fully deduct research-and-development expenses in the first year, 100 percent bonus depreciation, disaster tax relief, improvements in the Low-Income Housing Tax Credit, interest expensing and a tax agreement with Taiwan, according to Accounting Today. It would have increased the threshold for reporting income earned by an independent contractor from $600 to $1,000, with an adjustment to the increased amount for inflation. It would have also increased the penalties for aiding and abetting the understatement of tax liability with respect to the Employee Retention Tax Credit .

Accounting Today noted that Democrats plan to portray Republicans as the party that blocked a pro-family tax cut that they calculated would have benefitted 16 million children as well as struggling small businesses. 

"This should be a no-brainer. Even House Republicans are for this," Senate Majority Leader Chuck Schumer (D-N.Y.) said. 

The tax package passed the House on a 357- 70 vote in January, Bloomberg reported at the time. It would have provided a boon for U.S. companies with large capital and domestic research expenditures, and it was a top priority of business lobbyists. Companies that would have benefited from the bill's passage included Boeing Co., General Motors Co., Deere & Co., Caterpillar Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc., according to Bloomberg Intelligence. A group of 250 business organizations, including the U.S. Chamber of Commerce, Business Roundtable and National Association of Manufacturers, lobbied hard for passage this year. 

Some Senate Republicans accused Schumer of playing politics with the bill. Sen Kevin Cramer (R-N.D.) said Schumer made a "cynical ploy" to hold the vote rather than allow amendments. Sen. John Cornyn (R-Texas) said the vote was "not an honest attempt to pass legislation,” Accounting Today reported.

Schumer told reporters he'd consider allowing amendments, but not until after the Senate's monthlong break. "They are going to feel a lot of pressure over August recess, and we hope they will come back and change their mind in September," he said of Republicans. 

Other Republicans have said that they don't want to give Democrats a win so close to the election in November. The IRS said that it would be able to send refund checks to families benefiting from the break within six weeks of the bill being enacted. 

Sen. Ron Wyden (D-Ore.) said that the Republicans' blocking of the bill could hamper a deal about extending any of the provisions of the Tax Cuts and Jobs Act next year. He said that such deals don't just happen by "osmosis" and will require the kind of bipartisan deal-making that the Senate Republicans rejected. 

 

 

 

Click here to see more of the latest news from the NYSSCPA.