House Democrats are proposing new tax breaks for universities, caring for the elderly, buying electric bicycles and an array of other incentives as part of the far-reaching spending package they are assembling.
But they did not unveil the touchiest part of their plans: a much-anticipated slate of tax increases intended to help defray the cost of the plan.
Under a 645-page bill released late Friday night as part of their budget reconciliation plan, they’d also create new breaks for buying electric cars and trucks; make Pell education grants completely tax free; offer new incentives to rehab homes in poor neighborhoods and provide a new tax subsidy for hydrogen energy production.
As expected, their plan also calls for extending their signature monthly Child Tax Credit payment program and making permanent other subsides aimed mostly at low-income people.
The proposals, by the House Ways and Means Committee, amount to their next tranche of their reconciliation plan, which the panel said it intends to take up on Tuesday.
The committee has been releasing its portion of Democrats’ reconciliation plans piecemeal, beginning with the least controversial sections, as they try to work out differences among themselves.
The package released Friday didn't take on some other major questions that could bedevil Democrats, including how they intend to address a cap on state and local deductions, an issue that has deeply divided lawmakers, with some demanding its repeal and others blanching at the idea of reducing taxes on the wealthy.
“Our proposals allow us to both address our perilously changing climate and create new, good jobs, all while strengthening the economy and reinvigorating local communities,” said Ways and Means Chair Richard Neal (D-Mass.).
“These proposals expand opportunity for the American people and support our efforts to build a healthier, more prosperous future for the country.”
A cost estimate of the plan was not immediately available.
It amounts to an opening bid with the Senate, though Democrats have been working behind closed doors to try to narrow differences between them ahead of time.
It’s also a reminder that, while much of the focus has been on Democrats’ plans to raise taxes on corporations and the rich, they are cutting taxes on many others as well.
And the proposal represents a shift away from the last major rewrite of the tax code: Republicans’ Tax Cuts and Jobs Act. If that law was partially intended to try to simplify the tax code, Democrats’ plan moves in the opposite direction, with a welter of new provisions, some with complicated rules.
One of the Democrats’ most sweeping proposals is also among the least surprising: A plan to extend their recent expansion of the Child Tax Credit until 2025, though they would make permanent provisions making the credit, worth up to $3,600 per child, fully refundable.
They’d also create a new payroll tax break designed to try to push up wages among poorly paid child care workers – a key issue for Neal. Another provision offers a credit worth up to $4,000 for caring for the elderly.
Their plan also includes a long list of clean energy incentives, including multiple provisions subsidizing electric vehicles. They’d offer a $7,500 credit for buying electric cars, though the break would be even larger if the final assembly of those cars is done at factories in the U.S. where workers have collective bargaining agreements.
At the same time, they’d create a new credit for buying commercial electric vehicles as well as a 15 percent credit for purchasing electric bikes.
Other parts of the plan would revise provisions imposed by Republicans as part of their 2017 tax cuts.
They’d reinstate writeoffs for casualty losses that were deleted by that law, ease an excise tax on university endowments, and reinstate a fringe benefit break for commuting by bicycle. Democrats would also dump a requirement that kids benefiting from the Child Tax Credit have a Social Security number, a move that was designed to disqualify undocumented immigrants.
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September 11, 2021 at 08:11PM
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House Democrats propose array of new tax incentives - POLITICO
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