Chairman Smith: “Because of this bill, working parents crushed by high prices will have an easier time putting food on the table, more things will be made here in America, and the nation will be more competitive with China.”
WASHINGTON, D.C. – Small businesses are closer to getting the help needed to grow, create jobs, and raise wages, and working parents are closer to the help needed to take care of their family, now that the House of Representatives passed the Tax Relief for American Families and Workers Act. The legislation locks in $600 billion of pro-growth, pro-worker tax policy by restoring three key incentives from the 2017 Trump tax cuts: R&D expensing, interest deductibility, and immediate expensing. The Child Tax Credit builds on the success of the Trump tax law by indexing the credit to inflation and ending the penalty on large and growing families, providing help to those hurting because of skyrocketing prices rising over 17 percent since Joe Biden became president.
This legislation also helps small businesses, families, and workers by raising the immediate expensing cap for small businesses, cutting red tape for job creators, giving tax relief to families hit by disasters, and saving taxpayers $75 billion by ending a COVID-era program that has been plagued by runaway spending and rampant fraud.
This bipartisan tax package is the most significant non-emergency tax package in nearly a decade, when Congress passed the PATH Act in 2015.
Click here to watch Chairman Smith’s opening statement.
Ways and Means Committee Chairman Jason Smith (MO-08)released the following statement on House passage of the Tax Relief for American Families and Workers Act:
“This tax package is pro-growth, pro-jobs, and pro-American. Both the $600 billion of pro-growth tax incentives that benefit job creators and the structure and work requirements of the Child Tax Credit in this legislation were first signed into law by President Trump. Last year, the Ways and Means Committee traveled the country and listened to small business owners and American workers about their ideas to make life better for themselves and their neighbors. The Tax Relief for American Families and Workers Act is a direct response to their plea for relief. Because of this bill, working parents crushed by high prices will have an easier time putting food on the table, more things will be made here in America, and the nation will be more competitive with China.
“I am eager to get this bill passed by the Senate and signed into law. Millions of working families and Main Street businesses are counting on Congress to get this done. Let’s deliver.”
Continuing 2017 Trump Tax Reform’s Record of Success
The package locks in $600 billion of tax incentives from the 2017 Trump tax reforms with a record of creating jobs, raising wages, and investing in America:
- Research and Development (R&D) investment incentives will…
- Create over $70 billion in new R&D investment in the United States.
- Support 2 million direct R&D jobs and over 21 million total jobs – particularly in U.S. manufacturing.
- Interest Deductibility will…
- Create 867,000 new jobs.
- Generate $58 billion in additional take-home pay for American workers.
- 100% Immediate Expensing will…
- Increase investment by $400 billion.
- Create 73,000 new jobs.
Child Tax Credit is Pro-Family and Pro-Work
The Child Tax Credit indexes the credit to inflation, ends the large family penalty, maintains the work requirement, and keeps in place critical safeguards from the 2017 Trump tax cuts:
- Keeps work requirements & strengthens incentives to work
- Ensures no loopholes for illegal immigrants to game the system
- Prevents the Biden IRS from playing politics with refund checks
Hundreds of Organizations Representing Millions of Americans Are Speaking Up In Strong Support of This Legislation
- Over 22,000 small businesses and over 250 trade associations agree bipartisan tax package protects jobs
- Pro-taxpayer organizations agree the Tax Relief for American Families and Workers Act continues pro-growth record of GOP tax reform
- Faith, family, and pro-life groups support pro-family and pro-work Child Tax Credit
For the section-by-section, click here.
Supports Working Families with an Enhanced Child Tax Credit
- Expand access to child tax credit: Incrementally increases the refundable portion of the child tax credit for 2023, 2024, and 2025.
- Eliminates penalty for larger families: Ensures the child tax credit phase-in applies fairly to families with multiple children.
- One-year income lookback: Flexibility for taxpayers to use either current- or prior-year income to calculate the child tax credit in 2024 or 2025, similar to bipartisan action taken six times in the past 15 years.
- Delivers inflation relief: Adjust the tax credit for inflation starting in 2024.
Expands Innovation and Competitiveness with Pro-Growth Economic Policies
- Research & Development (R&D) expensing: Allows businesses of all sizes to immediately deduct the cost of their U.S.-based R&D investments instead of over five years – encouraging American innovation and improving our competitive position versus China and the rest of the world.
- Interest deductibility: Continued flexibility for businesses forced to borrow at higher interest rates to meet their payroll obligations and expand their operations.
- 100 percent expensing: Restores full and immediate expensing for investments in machines, equipment, and vehicles.
- Taiwan double tax relief: Strengthens America’s competitive position with China by removing the current double taxation that exists for businesses and workers with a footprint in both the United States and Taiwan.
Builds Up Main Street and Rebuilds Communities Struck by Disasters
- Expand small business expensing cap: Increases the amount of investment that a small business can immediately write off to $1.29 million, an increase above the $1 million cap enacted in 2017.
- Cut red tape for small business: Adjusts the reporting threshold for businesses that use subcontract labor from $600 to $1,000 and index for inflation – the first update to the threshold since the 1950s.
- Help families get back on their feet: Provides disaster tax relief for recent hurricanes, flooding, wildfires, and the Ohio rail disaster.
Increases supply of low-income housing by enhancing the Low-Income Housing Tax Credit, a public-private partnership with a proven track record, with increased state allocations and a reduced tax-exempt bond financing requirement.
Eliminates Fraud and Waste by Ending the Employee Retention Tax Credit Program
- Saves over $70 billion in taxpayer dollars: Accelerates the deadline for filing backdated claims to January 31, 2024 under the COVID-era employee retention tax credit – a program hit by major cost overruns and fraud.