While some in Washington seem to think the economy is doing great, regular folks aren’t feeling so optimistic. Survey after survey indicates that people are frustrated with the state of the economy — with good reason.
Despite recent headlines suggesting that inflation has “ cooled ” and “ held steady ,” prices in November were still higher than they were a year ago. And while inflation as a monetary policy phenomenon has apparently slowed, families living in the real world are still dealing with the fallout of sky-high prices at the supermarket and the gas pump. Paychecks are stagnant, and the dollar isn’t going as far. No wonder people keep telling pollsters they’re upset .
JAPAN PLANE CRASH: AIRCRAFT ERUPTS IN FLAMES WITH 379 PEOPLE ON BOARD
While it’s true there’s no quick fix for this economic malaise, Congress has the opportunity to start the year off right by delivering on a literal kitchen table issue: a tax bill that puts more money back into the paychecks of the working class.
A handful of key Republican lawmakers in the House spent the last weeks of 2023 working hard on securing a tax deal that would be good for businesses and families. The reported talks centered on extending the child tax credit at levels passed under former President Donald Trump and restoring the recently changed research and development tax credit.
While an end-of-year tax bill, which we at American Principles Project advocated , didn’t come to fruition, it’s positive to see progress being made on a matter that would help tens of millions of families. As we recently noted, “A deal that strengthens the child tax credit and bolsters American businesses is one that should be taken seriously.”
It’s critical that extending the child tax credit be part of this deal because it has been delivering for families for more than five years now. When Republicans strengthened the child tax credit from $1,000 to $2,000 in the Trump administration’s historic 2017 tax legislation, not a single Democrat voted in favor of it. According to the Center on Budget and Policy Priorities, “the child tax credit lifted 4.3 million people ― including 2.3 million children ― above the poverty line in 2018.” Without this added help, more families would be worse off.
The child tax credit is also not a handout. It subtracts from a taxpayer’s overall tax liability from earned income. That means employment is rewarded, and the credit can’t be used to reinforce savings or just pay down debt.
Unfortunately, the doubled child tax credit expires at the end of 2025, meaning millions of tax filers will see their benefits decline by 50% per child. It would be shortsighted for us to cut this important lifeline for people, especially since we still have some time to avoid its expiration.
In addition to being a sound policy, the child tax credit is quite popular. Support for the child tax credit crosses party lines and is widely supported by Democrats, Republicans, and independents, according to the Economic Security Project.
Rather than wait until the eleventh hour to address a situation, as is so common in Washington, lawmakers should agree to extend it now.
This is also an opportunity for lawmakers to bolster our economy and support business. The same 2017 tax law that smartly doubled the child tax credit also allowed businesses to change the way they file for research and development expensing, saving them tens of thousands of dollars every year. Businesses from manufacturing to broadband have sounded the alarm about the immediate cost increases to their operations just for investing in growth or the future. But Republicans are listening, and we can fix it. They understand high interest rates and poor domestic policy from the White House are already too much to bear in some cases, and extending the R&D expensing policy is an easy win for businesses and families alike.
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So, where do we go from here? Well, the Democratic-controlled Senate Finance Committee and Republican-controlled House Ways and Means Committee still need to agree on a bill. Getting it to the floor for votes as soon as possible this year should be just as much of a priority as the host of other problems Congress failed to address before leaving town. If a bill can be passed by February, perhaps families and businesses will be able to breathe a sigh of relief just as tax season hits.
We should hope that our elected officials return to Washington with their appetites for actually getting something done reinvigorated. There is absolutely zero shame in a bipartisan deal that includes the child tax credit and pro-growth incentives. And as Rep. Chip Roy (R-TX) pointed out in November , House Republicans running for reelection need to be able to point to concrete accomplishments to win this year. Achieving this major policy victory for families and businesses would be a good start.
Terry Schilling is the president of American Principles Project. Follow him on X @Schilling1776.
Want to fix the economy? Start by extending Trump’s expiring tax cuts
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03.01.2024
While some in Washington seem to think the economy is doing great, regular folks aren’t feeling so optimistic. Survey after survey indicates that people are frustrated with the state of the economy — with good reason.
Despite recent headlines suggesting that inflation has “ cooled ” and “ held steady ,” prices in November were still higher than they were a year ago. And while inflation as a monetary policy phenomenon has apparently slowed, families living in the real world are still dealing with the fallout of sky-high prices at the supermarket and the gas pump. Paychecks are stagnant, and the dollar isn’t going as far. No wonder people keep telling pollsters they’re upset .
JAPAN PLANE CRASH: AIRCRAFT ERUPTS IN FLAMES WITH 379 PEOPLE ON BOARD
While it’s true there’s no quick fix for this economic malaise, Congress has the opportunity to start the year off right by delivering on a literal kitchen table issue: a tax bill that puts more money back into the paychecks of the working class.
A handful of key Republican lawmakers in the House spent the last weeks of 2023 working hard on securing a tax deal that would be good for businesses and families. The reported talks centered........
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