Tax bill moves through Ways and Means Committee

The Tax Relief for American Families and Workers Act, H.R.7024, will now go to the floor for debate.
BY LUKE REYNOLDS
Tax-bill-moves-through-Ways-and-Means-Committee (1)

The Tax Relief for American Families and Workers Act of 2024, H.R.7024, passed through the House Committee on Ways and Means and will now go to the House floor for debate.  

The Irrigation Association, Fairfax, Virginia, endorsed the bill before its introduction through supportive action in November. 

According to the bill’s summary, it increases and modifies child tax credit provisions, increases depreciation allowances to promote economic innovation and growth, provides special rules for the taxation of residents of Taiwan with income from U.S. sources, increases tax relief provisions for losses due to natural disasters and wildfires, and increases the low-income housing tax credit. 

Jason Smith, Ways and Means Committee chair, R-Missouri, emphasized a number of purported benefits of the bill on Fox Business. 

“We’re working on some pro-growth, pro-worker, pro-American tax policies that will support families and main street businesses,” Smith said. “It will also help sharpen our competitive edge with China and boost more innovation. Three very important provisions of Trump’s tax cuts expired, just in the last couple of years. Research and development expensing, which is extremely important. This provision would add $70 billion in investment. The interest deductibility provision is extremely important where small businesses are being affected with huge interest rates. This will create 867,000 new jobs just by this provision, and it will bring in $58 billion in take home wages.” 

Highlighting the far-reaching impacts of this plan, Senate Finance Committee Chairman Ron Wyden, D-Oregon, underscores the significance of pro-family policies in today’s challenging political landscape.

“Sixteen million kids from low-income families will be better off as a result of this plan, and given today’s miserable political climate, it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead,” says Wyden. “At a time when so many people in Oregon and all across America are getting clobbered by rising rents and home prices, the improvements this plan makes to the Low-Income Housing Tax Credit will build more than 200,000 new affordable housing units. By incentivizing R&D, this plan is also going to promote innovation and help sharpen our economic competitiveness with China and the rest of the world. My goal remains to get this passed in time for families and businesses to benefit in this upcoming tax filing season, and I’m going to pull out all the stops to get that done.”

According to a Deloitte Capitol Hill briefing, the bill would: 

  • delay through 2025 mandatory capitalization of research expenditures under section 174 — for domestic expenditures only — retroactive to expenses paid or incurred in tax years beginning after Dec. 31, 2021;  
  • reinstate 100% bonus depreciation through 2025, for qualified property placed in service after Dec. 31, 2022;  
  • reinstate through 2025 the allowance for depreciation and amortization for the 30 percent limitation on interest deductions, retroactive to taxable years beginning after Dec. 31, 2023, and, if elected by the taxpayer, retroactive to taxable years beginning after Dec. 31, 2021; 
  • enhance the child tax credit through 2025 by permitting the refundable portion of the credit to be calculated on a per-child basis (for tax years 2023, 2024, and 2025), gradually increasing the overall limit on refundability (for tax years 2023 through 2025), allowing parents to use prior-year income to qualify for the credit (for tax years 2024 and 2025), and indexing the maximum credit amount for inflation (for tax years 2024 and 2025). 

“This bill has several important pieces for America’s small businesses: an increase in Section 179 deductions, increased bonus depreciation back up to 100%, and a higher threshold for 1099 submission from its current $600 level to $1,000,” says Todd McCraken, National Small Business Association CEO. “I hope the rest of Congress follows this example of strong, bipartisan leadership and moves quickly on this bill — America’s small businesses are counting on them.” 

The Penn Wharton School of Business has conducted an analysis on the financial impact of the bill, projecting a revenue loss of about $3 billion over a decade. According to the analysis, a range of outcomes is possible, with potential revenue losses as high as $15 billion or gains up to $11 billion, especially due to uncertainties surrounding the Employee Retention Credit cost estimate.  

“We have been pressing Congress to take action on these important tax provisions for irrigation businesses and are pleased with this progress. It is imperative that those in the irrigation industry reach out to their members of Congress to share the importance of Congress taking swift action on this bill,” says Nathan Bowen, Irrigation Association advocacy and public affairs vice president. “The legislation would provide important support for businesses in the irrigation industry and encourage investments that will grow the economy and spur innovation.” 

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