In a historic move the House approved a bipartisan $78 billion tax package on Wednesday, ushering in temporary expansions to the child tax credit 2024 and reinstating various business tax benefits. The bill with rare bipartisan backing now heads to the Senate under the watch of House Speaker Mike Johnson, who manages a slim majority. The resounding 357 to 70 vote saw 188 Democrats and 169 Republicans in favor addressing the critical issue of child tax credit 2024.
Larger Credits for Low-Income Families
The package aims to provide increased credits to low-income families benefiting over 80% of the 16 million children who currently don’t receive the full credit due to family income. Projections from the Center on Budget and Policy Priorities suggest the initiative could lift half a million children out of poverty and improve the financial situations of an additional 5 million children below the poverty line by 2025.
Despite facing pushback from moderates, notably in New York over the absence of a federal deduction cap adjustment, the overall impact on the federal budget is expected to be minimal reducing revenues by less than $400 million over a decade.
Concerns and debates surround the proposal’s potential impact on work incentives and its accessibility to families with very low incomes drawing mixed reactions from both Republicans and Democrats.
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Tax Relief for Businesses and Disaster Aid
Beyond child tax credit 2024 enhancements the package temporarily reinstates various business tax benefits from the 2017 Tax Cuts and Jobs Act, providing immediate deductions for research investments, machinery and equipment. Disaster relief measures are also embedded, addressing recent calamities and aiming to boost low-income housing.
The new law speeds up the time by which people can apply for money from the Employee Retention Tax Credit, a program from the time of Covid-19. This change is estimated to save taxpayers more than $78 billion and helps balance out a big part of the total cost of the entire package.
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