WASHINGTON — Parts of the tax overhaul legislation from President-elect Donald Trump’s first term expire at the end of this year. On Tuesday, the Republican chairman of the House Ways and Means committee laid out the stakes if Congress lets them lapse.
“Forty million parents will have their child tax credit slashed in half,” said Rep. Jason Smith, R-Missouri. “Two million family farmers will see the death tax exemption slashed in half.”
In 2017, under President Trump, the corporate tax rate went from 35% to 21%. Republicans said Congress should permanently extend the package, but Democrats countered saying wealthy corporations benefited more than working families. One witness testified that extending the Tax Cuts and Jobs Act could cost families if Trump goes forward with his plans to use tariffs to pay for it.
“One financing mechanism Trump has floated is a giant across-the-board tax on all imported goods,” said Brendan Duke, the senior director of economic policy at the Center for American Progress. “A range of analyzes from progressive to conservative think tanks estimate this would cost a typical family thousands of dollars by making a trip to the grocery store or pharmacy more expensive.”
And, Democrats reminded the committee that tax cuts don’t pay for themselves.
“I don’t understand the logic of suggesting that we’re going to attack the national debt and simultaneously add $4 trillion to it by a tax cut proposal,” said Rep. Richard Neal, D-Massachusetts.
But several witnesses still asked the committee to make the benefits permanent.
“If the 199A deduction expires, the taxes on pass-through businesses will go up sharply,” said Michelle Gallagher, an accountant for businesses and families.
“The money we have received from the child tax credit has been the only money in our savings account,” said Margaret Marple, a mother in Lynchburg, Virginia.
Marple said her family also benefited from the expanded child tax credit in 2021. Under the Biden administration, the benefit allowed eligible families to receive up to $3,600 per child, but that has since expired and gone back down to Trump’s rate of $2,000 per child.
Trump expanded the child tax credit during his first term from $1,000 to $2,000. If the tax package were to expire, the credit would be cut in half.
Democrats said if they’re going to spend another $4 trillion on tax cuts, part of it should go to increasing the child tax credit back to $3,600, even for stay-at-home parents.
“Why do we have a work requirement in order to make the Child Tax Credit totally refundable?” asked Rep. Gwen Moore, D-Milwaukee. “I think poor families and poor children deserve this benefit as well.”
Though Democrats expressed their concerns, it’s unclear if Republicans, who now control Congress, will be willing to make any concessions on the 2017 tax package if it’s extended.
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