By Richard Cowan
WASHINGTON (Reuters) – Republicans in the U.S. House of Representatives on Friday unveiled a series of new tax breaks for businesses and families while proposing to reverse some of President Joe Biden’s legislative victories, including credits for stimulate the sale of clean-burning electric vehicles. .
Three related bills were introduced on Friday with the aim of pushing the bill through the House Ways and Means Committee next week. That’s when the Joint Committee on Taxation is also expected to release its analysis of the package.
White House spokeswoman Karine Jean-Pierre called the proposals a “tax scam” and alleged that “the (Republican) priority is not to cut the deficit or outperform the world, their priority is to give gifts to wealthy special interests and corporations at the expense of everyone else.”
Democrats were already focused on whether the tax legislation could add to the soaring federal debt.
“These policies will bring relief to working families, strengthen small businesses, create jobs and protect American innovation and competitiveness,” Ways and Means President Jason Smith said in a statement.
The committee said there were hundreds of billions of dollars of provisions included. Some are extensions of tax breaks while others eliminate or cancel existing ones, like Biden’s electric vehicle credit.
Rep. Richard Neal, the panel’s lead Democrat, said Republicans are “setting the stage for even deeper cuts in 2025” when the provisions of the 2017 tax law expire. The measure introduced on Friday, Neal said, would usher in “retroactive corporate tax cuts, next to nothing for the most vulnerable children and families, and quiet favors for big oil.”
Republicans, who control the House, introduced the proposals days after Biden, a Democrat, signed into law. Republicans have sought to begin tackling the rapidly growing debt with about $1.3 trillion in spending cuts.
The law was associated with an urgent increase in the borrowing power of the United States by suspending the debt limit until January 1, 2025.
Under the proposed legislation, married couples filing jointly would receive a “deduction bonus” of $4,000 for two years which the committee says would potentially help up to 107 million families who benefit from the standard deduction.
The legislation would also dramatically expand how businesses could claim capital cost allowances, raising the threshold to permanent $2.5 million from the current $1 million contained in Republicans’ sweeping 2017 tax cut package. .
Other provisions include extending small business start-up tax benefits to “S Corporations,” while eliminating some of the “red tape” that small businesses are familiar with related to contract workers.
Democrats on the Ways and Means panel are expected to propose amendments to the bill, including a permanent extension of an expired portion of the child tax credit that lifted nearly 4 million children out of poverty in one year only during the coronavirus pandemic. Republicans opposed the measure.
Any bill that emerges from the House would likely face strong opposition in the Democratic-controlled Senate.
(Reporting by Richard Cowan; Additional reporting by Kanishka Singh; Editing by Paul Simao and Diane Craft)