Members of the U.S. House are weighing two important tax proposals, one that aims to benefit families and businesses and another that seeks to permanently repeal the federal “death tax.”
The two pieces of legislation being considered by lawmakers are the Tax Relief for American Families and Workers Act of 2024 and the reintroduced Death Tax Repeal Act.
The first bill is a $78 billion bipartisan tax deal the House Ways and Means Committee advanced in a 40-3 vote on January 19. It aims to provide relief for families and Main Street businesses by expanding the child tax credit and restoring bonus depreciation over the next three years. Several lawmakers have touted the tax deal for its support of both families and homegrown businesses, yet it still has a long way to go as debates over federal spending levels continue in Congress.
With many Americans feeling the weight of inflation, high borrowing fees, and rising housing costs, many politicians on Capitol Hill are trying to get the new tax package passed by Congress and signed off by President Joe Biden before the tax filing season begins on January 29. The deal, brokered by Rep. Jason Smith (R-MO), chair of the House Ways and Means Committee, and Sen. Ron Wyden (D-OR), chair of the Senate Committee on Finance, was revealed on January 16, as previously covered by The Dallas Express.
It has been lauded for being a pro-family policy for its proposed expansion of the child tax credit and the low-income housing tax credit. The Center on Budget and Policy Priorities estimated that it would help around 400,000 children rise above the poverty line in the first year, followed by another 500,000 children or more in the subsequent two years.
In terms of business, the package revives Trump-era tax breaks for companies, allowing them to deduct U.S.-based research and development expenses without having to wait five years. The owners of smaller businesses would also be able to write off up to $1.29 million in expenses — an increase from $1 million.
Senate Majority Leader Chuck Schumer (D-NY), who supports the tax deal, claimed it “makes important progress to expand the Child Tax Credit, helps address our affordable housing crisis, and helps keep U.S. businesses competitive against the Chinese Communist Party.”
Meanwhile, Sen. Mike Crapo (R-ID), who serves on the Senate Finance Committee, was a bit more reserved in his praise, releasing a statement in which he called the agreement “a thoughtful starting point for the House to begin the process.”
“There are details that have to be worked out,” he added in separate remarks, according to Bloomberg.
Some politicians had a more negative reaction to the proposal. Rep. Lloyd Doggett (D-TX) was one of the dissenting votes on the House Ways and Means Committee.
“It’s far from the proclaimed 50/50 split, which, according to the Chairman’s own words, would give four times as much to corporations than children. Once again, the Committee makes its priority clear, and it’s certainly not children,” Doggett claimed, according to Forbes.
While Sen. Michael Bennet (D-CO) echoed this sentiment in a statement, saying he was “disappointed  [Wyden and Smith’s] proposal isn’t a return to the American Family Act,” in separate remarks, he pointed out that the proposed tax deal was a positive sign of things moving forward in Congress.
“What you’re seeing here in terms of politics is both parties — instead of failing and then pointing fingers at the other side and blaming the other side for failing — I think both parties have concluded that the American people would rather see progress, and they’d rather see the two parties working together,” said Bennet, according to The New York Times. “Whether there’s a political lens on that, I don’t know. But I suspect that is a reaction to people knowing that folks at home are sick and tired of the chaos.”
The other major tax proposal on the table, the Death Tax Repeal Act, was introduced by Rep. Randy Feenstra (R-IA) on January 18. It aims to do away with the 40% federal estate tax, often referred to as the death tax. This tax applies to inheritances valued over the exception cap that is set each year. This amounted to $13,610,000 per person or $27,220,00 million for married couples in 2024.
Although those against the measure cite the death tax and gift tax as drivers of taxpayer spending by the federal government, with some $33 billion in such taxes being collected in 2022, those in favor of the proposal look at it as a punitive act visited upon grieving families.
“I’m proud to lead 162 of my colleagues to permanently repeal the death tax, ensure that hardworking families, farmers, and small businesses keep more of their hard-earned money, and strengthen family-owned-and-operated enterprises in Iowa,” Feenstra said of the proposal in a statement.
“By fully eliminating the death tax, we can keep China away from our farmland, allow family farms and small businesses to succeed, and encourage the next generation of Iowa farmers and business owners to plant their roots in rural Iowa, support our main streets, and contribute to our economy,” he said.
