House Democrats unveil plans for array of new tax incentives

As expected, her plan also includes extending her monthly child tax deduction payment program and adding permanent other subsidies aimed primarily at low-income people.

The House Ways and Means Committee’s proposals represent the next installment of their reconciliation plan, which the panel plans to adopt on Tuesday.

The committee has published its plan piecemeal, starting with the least controversial sections, as they try to work out differences among themselves.

The package released on Friday didn’t take on anyone else key questions that could mislead Democrats, including how they plan to approach a cap on state and local deductions, an issue that has deeply divided lawmakers.

“Our proposals allow us to both address our dangerous climate change and create good new jobs while strengthening the economy and reinvigorating local communities,” said Richard Neal (D-Mass), chairman of Ways and Means .

“These proposals expand the opportunities for the American people and support our efforts to build a healthier, more prosperous future for the country.”

The provisions would cost $ 1.2 trillion, according to the official Joint Tax Committee, with the expansion of child loans accounting for nearly half of that.

The plan amounts to an opening offer from the House of Representatives’ tax clerks before the Senate takes up its plan, even though the Democrats tried behind closed doors to narrow the gaps between them beforehand.

It’s also a reminder that while much of the focus has been on Democrats’ plans to raise taxes for the corporate and wealthy, they are also lowering taxes for many others.

And the proposal is a departure from the last major revision of the tax bill: the Republican Tax Cuts and Jobs Act. While this law was partly aimed at simplifying the tax code, the Democrats’ plan goes in the opposite direction with a flood of new, partly complicated regulations.

While the Democrats fill out the details of their reconciliation plans, they disagree on broader issues such as total spending and the amount of compensation savings.

One of the Democrats’ most far-reaching proposals is also one of the least surprising: a plan to extend their recent expansion of the child tax credit until 2025, though they would make permanent arrangements that would fully reimburse the credit, valued at up to $ 3,600 per child. At the same time, they would make a number of changes to how the loan works.

They also want a permanent temporary widening of the income tax credit and a long-term care break approved as part of a March stimulus package.

And they would introduce a new wage tax break to try to raise wages among poorly paid childcare workers – a key issue for Neal – as well as a loan of up to $ 4,000 to care for the elderly.

Their plan also includes a long list of clean energy incentives, including several provisions to subsidize electric vehicles. They would offer a $ 7,500 loan to buy electric cars, though the break would be even bigger if final assembly of those cars were done at factories in the U.S. where workers have collective agreements. They propose a new, separate break for buying used electric vehicles.

They would also create a new credit for commercial electric vehicle purchases as well as 15 percent credit for electric bicycle purchases. Overall, the green power interruptions would cost $ 235 billion, says JCT.

There are also educational provisions, including a new loan that university donors can take in lieu of a charitable withdrawal. The Democrats also want to repeal a rule that bans students convicted of drug offenses from receiving the American Opportunity Tax Credit, a college study grant.

Other parts of the plan would revise the rules imposed by Republicans as part of their 2017 tax cuts.

The Democrats would reintroduce accidental damage write-offs removed by this law, relax an excise tax on university foundations, and reintroduce a fringe break for commuting by bike. The Democrats would also drop the requirement that children benefiting from the child tax credit have a Social Security number, part of GOP tax legislation aimed at disqualifying undocumented immigrants.

It also provides a new incentive for companies to operate in Puerto Rico and other US territories; revives Obama-era Build America Bonds program; and, among other things, creates a new credit for those who participate in forest fire prevention programs.

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