Now that Speaker Johnson’s “laddered” bipartisan government funding plan has become law, Congress is set for a lighter workload through the holiday season. But a temporary break from the brink offers Republicans a prime opportunity to focus their attention on a year-end tax package – one which would help cement one of President Trump’s greatest economic accomplishments into law.
Beltway media is reporting that a bipartisan group of legislators are zeroing in on a tax bill that would extend and reform key parts of the Tax Cuts and Jobs Act. That foundational law, which passed in 2017, helped to unleash our economy by incentivizing American companies to invest here at home, while also putting money back into the pockets of working families.
But unfortunately, some of the TCJA’s best provisions are set to expire soon. The proposed compromise package would center around extending the Research & Development (R&D) Tax Credit and the Child Tax Credit.
Both credits are important, for different reasons. From a policy standpoint, we should obviously want to put American businesses in a position to expand and compete against foreign competitors. The recently expired R&D tax credit spurred all sorts of economic growth under Trump, and it incentivized our companies to dedicate resources towards innovation, which helped to create new jobs. Unfortunately, without this tax credit in place, our businesses are less able to invest in R&D. And as we languish, Communist China is making record investments into R&D within its own economy. If we fail to place a stronger policy emphasis on innovation, America risks falling further behind to our nation’s greatest adversary.
Another important provision that should be reauthorized is so-called “full expensing.” This pro-growth tax deduction encourages businesses to invest in American manufacturing, rather than outsource jobs overseas. Investing in the U.S. supply chain means putting more Americans back to work with good-paying, family-sustaining wages – all while insulating ourselves from foreign threats.
On an individual level, maintaining the doubled Child Tax Credit helps families cover a lot of the costs associated with raising children. The CTC expansion under the TCJA from $1,000 to $2,000 per child has been incredibly popular – and for good reason. Especially with high levels of inflation, raising a child is more expensive than it’s ever been. This credit serves as the most important family-centered credit in the tax code, and Congress would be wise to seek to extend it ahead of its expiration in 2025.
Not only does the CTC encourage more married young people to have children, but it helps young parents at the point in time they need it the most. $2,000 may not seem like a lot, but it goes a long way towards reducing economic anxiety and encouraging families to grow and expand – something we should be placing a policy emphasis on just like we do for businesses!
In recent weeks, family-focused organizations like my own (American Principles Project) have honed in on extending the CTC. We were proud to sign on to a letter with dozens of former elected officials and similarly-minded groups urging Congress to make this tax credit a priority. From our letter we noted, “Many of us have consistently supported strengthening the CTC, but never has this need been as pressing as it is today.”
But it’s important to note that while many activists are calling for an expansion in addition to an extension, the extension should be the priority. Families are already fairly satisfied with the existing tax credit. There will be plenty of time in the future to debate increasing the amount beyond $2,000 per child – but before the holidays, Congress should focus on extension and making sure that the CTC doesn’t expire.
Some may view the CTC as a handout, but that couldn’t be further from the truth. Since the credit subtracts from a taxpayer’s overall tax liability from earned income, the credit actually encourages people to earn a paycheck. It marries the experience of child-rearing with getting Americans back into the workforce. And at the same time, it serves as an investment in the future of this country. As America’s birth rates continue to lag, we should be doing everything we can to foster an environment where families feel more confident in having more children.
Lawmakers are closing in on a deal, which is good news for families, businesses, and taxpayers. A deal that maintains the child tax credit and bolsters American manufacturing and innovation is one that should be taken seriously. It would also help to establish a strong conservative foundation of policymaking under Speaker Johnson. There’s no question that a pro-family tax package for the holidays would be a great way to end the first year of a House Republican majority.
A Pro-Family Tax Package for the Holidays
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23.11.2023
Now that Speaker Johnson’s “laddered” bipartisan government funding plan has become law, Congress is set for a lighter workload through the holiday season. But a temporary break from the brink offers Republicans a prime opportunity to focus their attention on a year-end tax package – one which would help cement one of President Trump’s greatest economic accomplishments into law.
Beltway media is reporting that a bipartisan group of legislators are zeroing in on a tax bill that would extend and reform key parts of the Tax Cuts and Jobs Act. That foundational law, which passed in 2017, helped to unleash our economy by incentivizing American companies to invest here at home, while also putting money back into the pockets of working families.
But unfortunately, some of the TCJA’s best provisions are set to expire soon. The proposed compromise package would center around extending the Research & Development (R&D) Tax Credit and the Child Tax Credit.
Both credits are important, for different reasons. From a policy standpoint, we should obviously want to put American businesses in a position to expand and compete against foreign competitors. The recently expired R&D tax credit spurred all........
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