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End-of-Year Bipartisan Tax Package

Laura L. Brownfield
General Counsel

Last week, House GOP Ways and Means Committee Chair Jason Smith (R-Mo.) conveyed his optimism on the prospect of a year-end tax package. Richard Neal (D-Mass.) suggested the impeachment inquiry of President Biden may get in the way of tax negotiations. Nonetheless, Senate Finance Committee Chair, Ron Wyden (D.-Ore) indicated that Democrats are willing to move forward in a constructive way, but signaled he wants to see a child tax credit proposal proportional to the business tax breaks.

Meanwhile, the House GOP tax package, which raises the standard deduction by $2,000 for individual filers and $4,000 for joint filers for tax years 2024 and 2025, remains stalled over the state-and-local tax (“SALT”) deduction cap. GOP members of the bipartisan SALT Caucus (including members from New York and California) dedicated to reinstating the state-and-local tax deduction that the 2017 tax law capped at $10,000—are blocking their party’s tax bills from full House passage because it does not address the issue. While that legislation has no chance of passing the Democratic-controlled Senate, some measures could be wrapped into bipartisan end-of-the-year legislation to include expired business tax extenders like the research and development tax break, tax credits for affordable housing, and the child tax credit.

Note: This material was developed by Community Foundation for Southeast Michigan. It is published with the understanding that neither the publisher nor the author is engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a professional advisor should be sought.