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Child Tax Credit Expanded, Business Breaks Revived By Congress

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Child Tax Credit Expanded, Business Breaks Revived By Congress

(CTN News) – Legislators announced Tuesday a bipartisan deal to expand the child tax credit and provide business tax breaks.

As a result of months of negotiations and pursuing common ground in the divided Congress, House Ways and Means Chair Jason Smith, R-Mo., and Senate Finance Chair Ron Wyden, D-Ore., have reached a $78 billion tax agreement.

It still needs to be drafted into legislation and secured the votes in the Democratic-led Senate and Republican-led House. The top tax writers are hopeful that it will pass this year, just in time for Americans to file their taxes.

The bipartisan agreement will benefit American families by providing greater tax relief, strengthening Main Street businesses, boosting our competitiveness with China, and creating jobs, Smith said.

In the deal, NBC News reported earlier this month, refundable child tax credits would be enhanced to provide relief to struggling families and those with multiple children. Moreover, it would adjust the tax credit’s inflation-adjusted refundable cap to $1,600.

With this plan, 15 million kids from low-income families will be better off, and in today’s miserable political climate, passing a pro-family policy that helps so many kids get ahead is huge,” Wyden said.

An analysis by the liberal Center on Budget and Policy Priorities shows that the new child tax credit policy would benefit about 16 million low-income children.

According to CBPP, the expansion will reduce child poverty significantly. It is estimated that the expansion would raise 400,000 children above the poverty line within the first year. As incomes rise closer to the poverty line, more than three million children would be able to escape poverty.”

The Democratic Party demanded a larger child tax credit after an earlier version they passed expired, causing child poverty to fall and then rise after it expired. Under the new agreement, the monthly benefits would be smaller than those under the American Rescue Plan.

In a statement, Wikukawa said Biden “remains committed to fighting for the full expanded Child Tax Credit” that he fought for as part of the 2021 law.

“Thank you, Chairman Wyden and Chairman Smith, for increasing the Child Tax Credit for millions of families and supporting hundreds of thousands of affordable homes,” Kikukawa said.

Some of Trump’s 2017 tax cuts for businesses were revived by Republicans. A section-by-section summary released by the two tax-writing committees outlines research and experimental costs, the restoration of an earlier interest deduction, and an expansion of small-business expensing.

In a statement, Sen. Mike Crapo, R-Idaho, the top Republican on the Finance Committee, said the deal announced today by Chair Smith and Chair Wyden is a thoughtful starting point.

During the next few months, I will work together with my Senate colleagues to secure broad, bipartisan support for a tax package that provides adequate relief to working families and businesses.

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