


House Republicans have proposed temporarily increasing the child tax credit from $2,000 to $2,500, a boost that comes amid pressure from populists in the party.
The planned boost to the credit was detailed in a preliminary document describing a broader tax bill released Friday night by the Ways and Means Committee, which is the tax-writing committee in the House. The proposal spells out many of the tax provisions that Republicans hope to include in reconciliation, a legislative process that allows bills to bypass the filibuster and pass with only a simple majority in the Senate.
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The bill, which would enact much of President Donald Trump’s domestic policy agenda, makes many of the 2017 Trump tax cuts permanent.
“Pro-family, pro-worker tax provisions are the heart of President Trump’s economic agenda that puts working families ahead of Washington and will create jobs, grow wages and investment, and help usher in a new golden age of prosperity,” Committee Chairman Jason Smith (R-MO) said in a statement on the release of the text.
The tax bill, which is set to be marked up on Tuesday, envisions the child tax credit being boosted through 2028. The increase to $2,500 is essentially an inflation adjustment, given that is about how much the credit would need to be to have the same purchasing power as when it was doubled to $2,000 as part of the 2017 Tax Cuts and Jobs Act.
At that time, to keep the total cost of the tax overhaul down, at least on paper, Republicans wrote the law so that the child tax credit expansion and other provisions relating to households expired at the end of 2025. Now, Republicans hope to make those provisions permanent.
The increase in the child tax credit to 2025 might be a let down for some pro-family conservatives who have been pushing for an even bigger increase.
For instance, Sen. Jim Banks (R-IN) sponsored legislation this year that would increase the child tax credit amount from the current $2,000 level to $4,200 for families with a child up to age 5. The credit would be $3,000 for families with a child between 6 and 17.
The proposal released Friday night would also permanently extend the enlarged standard deduction that was included in the 2017 tax overhaul, and slightly increase it, which would provide more tax relief to families.
The bill would make all the lowered individual income tax rates permanent. It would also make permanent a major tax break for businesses that file through the individual side of the code, known as “pass-through” businesses, and enlarge it.
Additionally, the proposal calls for making permanent the increase in the exemption for bequests that are subject to the estate tax. The exemption would be raised to $15 million, meaning it would apply to only very rich decedents.
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The document, though, is silent on one of the most controversial provisions still being negotiated within the party, namely the $10,000 cap on state and local taxes paid imposed by the 2017 law. Some Republicans from New York and California, states that have high taxes, have said that they won’t vote for the legislative package unless the cap is increased. The majority of the party, though, opposes SALT deductions, as they’re known.