February 1, 2024
House approves tax bill
The House January 31 approved the $78 billion Tax Relief for American Families and Workers Act of 2024 (H.R. 7024), addressing TCJA pre-cliffs and the Child Tax Credit (CTC) plus the United States-Taiwan Expedited Double-Tax Relief Act, disaster relief, and housing provisions. The vote was 357-70, with 169 Republicans and 188 Democrats voting in favor; and 47 Republicans and 23 Democrats opposed. The bill was considered under suspension of the rules, which required a two-thirds majority vote and didn't allow for amendments to address relief from the TCJA $10,000 SALT deduction cap or any other issues.
Under the bill, restoring IRC Section 174 expensing for domestic R&D and the prior IRC Section 163(j) interest deductibility parameters are proposed to be retroactive to 2022 (with elections) and extended through 2025. Also included are an extension of 100% bonus depreciation and an increase in the IRC Section 179 small business expensing amount. The bill is nearly paid for with Employee Retention Credit (ERC) enforcement provisions.
Speaker Mike Johnson (R-LA) released a statement saying the bill "is important bipartisan legislation to revive conservative pro-growth tax reform," and praised the work of Ways & Means Committee Chairman Jason Smith (R-MO). "This bottom-up process is a good example of how Congress is supposed to make law," he said. Members of the New York delegation advocating for SALT deduction cap relief were reportedly assured that lawmakers would work on the issue in some future bill.
Attention now turns to the Senate, where plans aren't clear, but Republicans have expressed a desire to amend the bill. Majority Leader Chuck Schumer (D-NY) said following the regular weekly party lunches, "I support the tax bill, as I've stated before. I'm working with Senator Wyden to figure out the best way forward." Asked about the SALT cap issue, Senator Schumer said, "I believe that SALT is very important, it's been extremely detrimental to my state and many blue states, and we're going to figure out the best way to undo it."
Finance Committee Chairman Ron Wyden (D-OR) has continued to say, since he unveiled the package with Chairman Smith on January 16 and following the 40-3 Ways & Means vote on January 19, that strong House support could compel the Senate to act. "If it gets a really big vote," Wyden said in the New York Times, "this does not become a traditional political D's and R's kind of debate. People are going to say, 'We really need that money.' It's going to make a big difference."