House Passes Sweeping Bipartisan Tax Bill, Boosting Child Tax Credit and Business Tax Cuts

On Wednesday, the House of Representatives passed a landmark tax bill by 357 votes to 70. The $79 billion package now heads to the Senate, where Republicans are demanding changes.

Overall changes

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The bill’s two main provisions are an expansion to the child tax credit and the reinstatement of income deductions on business research and development and some capital investments. The bill is a temporary deal that would expire in 2025.

Rare cooperation

House Republicans expedited the bill through a process called “suspension,” which requires two-thirds of the chamber to vote yes instead of the usual simple majority. The widespread, bipartisan support for the bill was a rare moment of cooperation in what has otherwise been a deeply divided Congress.

Some opposition

The 70 “no” votes were mostly from far-right Republicans angry about the expanded child tax credit. However, some progressives also voted no due to the corporate tax breaks.

Unfair decision

“I cannot vote for a deal that lopsidedly benefits big corporations,” Rep. Rosa DeLauro explained. “The deal is inequitable.”

High cost

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The corporate tax breaks are estimated to cost over $34 billion over the next ten years. However, according to Reuters, they would encourage hundreds of billions of dollars in research and development and capital investment.

Return to old

These tax breaks were among Trump’s sweeping 2017 tax cuts, and expired in 2022. In the first year after Trump’s cuts, corporate tax revenues fell by 31%.

Overall failure

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Supporters of Trump’s cuts argued that they would pay for themselves. “It was unbelievable at the time,” the president of the Committee for a Responsible Federal Budget explained to NPR in 2019, “and it’s proven to be absolutely untrue.”

More for the rich

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According to a Guardian report from January 2024, Trump’s cuts “overwhelmingly benefited corporations, wealthy Americans, and foreign owners of US stocks.” CEPR reported in 2020 that the tax cuts “did not produce the investment and growth that was promised.”

Expanding credits

The recently passed bipartisan bill would permit Child Tax Credit claimants to receive more in cash payments. They would be able to claim up to $1,800 per child for 2023 (as a refundable claim), $1,900 per child for 2024, and $2,000 per child by 2025 — with the 2024 and 2025 values to be adjusted for inflation.

Specific boost

The expanded child tax credit would only be eligible for those already receiving the credits. “At a time when a majority of American voters believe tax[es] on big corporations should be increased,” Rep. Rosa DeLauro said, “there is no reason we should be providing corporations a tax cut while only giving families pennies.”

Open obstruction

On Wednesday, Republican Senator Chuck Grassley said he opposed the tax bill because it would make Biden “look good,” which in turn means “he could be reelected.”