TAX TAKE: Key Democrats on prospects for December business tax cut extension: slow down (Despacito)

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Since Congress returned from its August recess, there has been growing debate in the tax policy community about what will be included in December’s lame duck tax package. Many on Capitol Hill say such a tax package and what it includes will likely be determined by the November midterm elections and which party wins control of the House and Senate. I am evaluating. Nonetheless, legislative battles are raging over key tax proposals, such as research and development (R&D) depreciation adjustments and lower state and local tax (SALT) deduction caps.

But last week, a group of influential bicameral Democrats issued a joint press release stating that the December tax package would extend the “corporate tax cut” unless the expanded child tax credit (CTC) was also extended. said to prevent The letter welcomes key tax officials in the House and Senate, Rep. Susan Delvane (D-WA), Senator Michael Bennett (D-CO), Senator Sherrod Brown (D-OH), and Rep. -CT). Senators Bennett, Senators Brown and Rep. Delvene, particularly on the Senate Finance Committee and House Ways and Means Committee, respectively, will play key roles in shaping his December tax package. However, it’s important to note that Rep. De Lauro is chairman of the powerful House Appropriations Committee and will play a central role in drafting the December appropriations package. dead body.

New child poverty data released by the Census Bureau last week are likely to put pressure on Congressional Democrats to take a firm stand against the CTC. But including the expanded CTC provisions comes at a significant revenue cost (according to the Joint Taxation Commission, the cost of these CTC expansions was $109 billion when enacted in the American Bailout Plan). . This new CTC dynamic for him raises two key questions for him, as bipartisan support will likely be required for the December package to be enacted.

  1. Will Republicans be willing to negotiate the CTC in exchange for an extended business tax cut? This is an open question that may not be answered until after the midterm elections. That said, Senate Republicans, especially Senator Mitt Romney (R-UT), have recently shown a willingness to negotiate the CTC.
  2. If the expanded CTC is included in the December package, does that mean there may be flexibility in extending business tax concessions such as R&D amortization? Considering the significant costs associated with expanding the CTC And, especially since the CTC is a top priority for Democrats in Congress and the White House, it could certainly impact Republicans when negotiating broader business tax cuts in December.

Negotiations over the CTC could be crucial in determining the elements and scope of the December tax package, which includes the popular business tax break. Please pay attention to future developments. #tuck take

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