Bill to extend small-business tax breaks faces tough path, even with bipartisan backing
Legislation that would renew expired small-business tax breaks and bolster the child tax credit faces a difficult legislative path, even with initial support on both sides of the aisle.
A separate bill introduced late last week that would end the estate tax has almost no hope of enactment this year but serves as a marker for tax reform efforts in 2025.
On Friday, the House Ways and Means Committee approved with overwhelming bipartisan support, 40-3, the Tax Relief for American Workers and Families Act. The measure would revive tax breaks for research and development spending, boost the deductibility of investments, such as in equipment, and business loans, increase depreciation expensing of qualifying property, and increase the child tax credit.
The small-business provisions were originally approved in a 2017 tax reform law but have expired. Altogether, the legislation that sailed through the House panel last week would provide $70 billion in tax cuts.
The bill was introduced with the backing of Rep. Jason Smith, R-Mo. and chair of the House Ways and Means Committee, and Sen. Ron Wyden, D-Ore. and chair of the Senate Finance Committee. But the bipartisan momentum doesn’t guarantee it will get through Congress this year.
Supporters of the bill have to overcome legislative obstacles that make its final passage uncertain, said Marc Gerson, a partner at Miller & Chevalier. For instance, the bill would have to pass on the House floor, where some Democrats might push for a bigger child tax credit and some Republicans might demand a provision lifting the deduction limits on state and local taxes.
In the Senate, the ranking member of the Senate Finance Committee, Republican Mike Crapo of Idaho, described the bill as a
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