Stalled Tax Legislation Sees Glimmer of Hope
As the Senate gears up to reconvene after a lengthy recess, the future of a pivotal tax bill aimed at aiding working families and extending corporate tax breaks is starting to look brighter. Despite previous Republican resistance, private discussions indicate a shift in attitude among some GOP lawmakers, who are now considering backing the bill with minor modifications.
The proposed $79 billion legislation, which has already cleared the House with significant bipartisan support, seeks to expand the child tax credit—a move that could potentially elevate 400,000 children above the poverty line. This expansion is paired with business tax incentives that were initially introduced during the Trump administration in 2017. The Internal Revenue Service has expressed its capability to implement the credit retroactively, aligning with lawmakers’ ambition to time the bill’s action with the April 15 tax deadline.
However, opposition from Senator Mike Crapo (R-Idaho) has been a stumbling block, particularly over provisions that would benefit low-income families. Crapo’s stance has influenced other Republicans to hold off on public support for the bill, granting him leverage in seeking amendments. Yet, behind closed doors, a sufficient number of Republican senators appear ready to advance the legislation without those changes, according to sources familiar with the matter.
Senate Majority Leader Charles E. Schumer (D-N.Y.) has signaled potential movement on the bill in his recent communication to lawmakers, listing it among other priorities for the upcoming legislative sessions. The Senate’s immediate focus will be on impeachment proceedings against Homeland Security Secretary Alejandro Mayorkas, but the tax bill could come to a vote soon after.
Senator Ron Wyden (D-Ore.), one of the bill’s architects, has offered concessions to address some of Crapo’s concerns. Despite these efforts, negotiations have hit an impasse. Public support for the bill now largely depends on Crapo’s negotiation stance, with many lawmakers looking to him for guidance.
Despite the hurdles, there is bipartisan enthusiasm for aspects of the tax package, particularly the research-and-development credit and the child tax credit provision. Advocates and some Republicans believe that if brought to a vote, the legislation has a strong chance of overcoming a filibuster.
The new bill would not only expand the child tax credit but also link it to inflation starting in 2025, providing an additional financial boost for eligible families. This enhancement, along with other business-friendly measures, could play a crucial role in maintaining global competitiveness and supporting low-income parents.
As negotiations continue and lawmakers return to Capitol Hill, all eyes will be on whether bipartisan cooperation can bring this stalled tax legislation across the finish line.
