House Ways and Means Committee Passes Republican Tax Bills
On Tuesday of last week, the House Ways and Means Committee, chaired by Jason Smith (R-MO), passed a tax package of three bills on a partisan basis, with no Democratic support. The bill package is seen as an opening bid in what is likely to be negotiations expected to culminate in year-end tax legislation. The committee-passed bill would extend several expiring tax provisions from the 2017 Tax Cuts and Jobs Act important to businesses and provides additional tax breaks to individuals. Extensions of research and development tax credits, bonus depreciation, and allowance for interest expense deductions are among the provisions included in the legislation.
While many of these provisions have bipartisan support, Democrats had also wanted to include renewal of the expanded child tax credit that was put in place during the COVID-19 pandemic, which many Republicans also support. In addition, several Democrats and some Republicans from high-tax states wanted to raise the state and local tax exemption. In its current form, the committee bill stands little chance of passage in the Democratic-controlled Senate, where many of the Democratic priorities will have to be included to ensure passage of tax legislation.