The bipartisan tax deal remains in limbo in the Senate, due in part to objections raised by the top Republican on the Senate Finance Committee, while supporters seek an elusive breakthrough.
The Tax Relief for American Families and Workers Act (H.R. 7024) passed the House in an overwhelming bipartisan vote on Jan. 31, but momentum has been steadily slipping as the bill languishes in the Senate. Senate Finance Committee Ranking Member Mike Crapo, R-Idaho, continues to voice concerns over the design of the temporary, more generous child tax credit included in the deal. The possible Finance Committee chair-in-waiting released a detailed statement outlining his concerns over both policy in the bill and how it could impact the anticipated multi-trillion dollar
“Efforts to pressure Senate Republicans to rubber-stamp the Wyden/Smith tax deal have been counterproductive,” Crapo said in the statement. “I remain concerned the CTC provisions undermine the work requirement and represent a significant shift — described by some Democrats as a down payment — to transform the CTC from primarily working family tax relief into a government subsidy.”
While the bill still appears to enjoy strong bipartisan support in Congress, Senate Republican supporters do not want to supersede their lead tax writer. Crapo’s policy and process concerns likely need to be assuaged for the bill to be attached to another legislative vehicle or brought to the floor under a bipartisan agreement. Any substantive changes to the bill will require it to be sent back to, or conferenced with, the House and could upset the delicate balance of support.
Still, given the large amount of bipartisan support for the bill, including from Senate Finance Committee Chair Ron Wyden, D-Ore., Senate Majority Leader Chuck Schumer, D-N.Y., several Senate Republicans, and President Joe Biden, the legislation still has a viable path to enactment.
The timing is not clear. Wyden wants to enact the bill by April 15, though this may not be a hard deadline. The fast-track scenario would be to attach it to the government funding bills due by March 22, though a breakthrough will be needed to allow it to happen, and House and Senate leadership may not want to further complicate efforts to keep the government open. The Senate is scheduled to recess again from March 25–April 8, leaving little floor time to move forward between now and mid-April. If Democrats cannot reach a broader agreement with Republican leadership, they could eventually bring it to the floor unilaterally and try to secure enough Republican votes to bypass 60-vote procedural hurdles. Tax bills are difficult to navigate on the floor without a bipartisan agreement on process, however, and Republican supporters could be reluctant to help Democrats enact a bill over objections from Crapo and, possibly, a majority of their conference.
See our prior legislative updates for more details on the bill itself. Taxpayers should consider assessing the potential impact and evaluating their planning opportunities in preparation for potential enactment.
Contacts:
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “§,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.
Share with your network
Share