MBA Career Development: Congress Finalizes $70 Billion Deal on Child Tax Credit and Business Tax Breaks

Last Updated on January 13, 2024 by Robert C. Hoopes

Congressional leaders are on the verge of finalizing a bipartisan and bicameral deal that could have a significant impact on families and businesses across the country. This eagerly awaited agreement is estimated to be worth a staggering $70 billion and aims to provide much-needed tax breaks and expand the child tax credit.

The negotiations for this groundbreaking deal are taking place between members of the Senate Finance Committee and the House Ways and Means Committee. While both sides are working towards a common goal of providing financial relief, the specifics of the deal have been a subject of intense debate.

Democratic legislators are pushing for enhancements to the child tax credit, targeting support towards needy families and those with multiple children. Their counterparts in the Republican party, on the other hand, are seeking new tax incentives that would primarily benefit businesses, especially in an election year.

The key objective for both sides is to finalize the deal by January 29, ensuring that families and businesses can benefit from the proposed tax breaks as soon as possible. The deal includes boosting refundable child tax credits and lifting the cap on refundable credits to provide targeted relief to struggling families.

Additionally, the agreement incorporates certain business tax breaks, such as the full expensing for domestic research and development and the restoration of the pre-2017 interest deduction, which were initially implemented during the Trump tax cuts.

The emergence of this deal reflects a rare example of bipartisan legislating in a divided Congress. Democrats are eager to reinstate an expanded child tax credit, as it played a significant role in reducing child poverty during its limited duration. Republicans, previously reluctant to support child cash payments, are now recognizing the importance of delivering for their business allies in an election year.

However, negotiations have not been without their fair share of challenges. Democratic housing provisions and Republican tax issues related to natural disasters have been some of the major stumbling blocks during the talks. Liberal lawmakers express concerns about the deal’s potential to provide excessive tax breaks to corporations, while others argue that it is a necessary compromise to support struggling families and boost businesses.

Nevertheless, members from both parties have expressed support for various aspects of the deal, underlining the importance of reaching a resolution. Ultimately, this bipartisan agreement is seen as a significant victory for the middle-class Americans and families raising children, providing them with much-needed financial relief during these challenging times.