House Democrats release bills to renew tax breaks, expand tax credits for workers and families

Key House Democrats on Tuesday released legislation to renew expired tax breaks and expand tax credits benefiting low- and middle-income workers and families.

The House Ways and Means Committee is scheduled to vote on both bills Thursday.

The bills come as Congress have wrestled with how to address a host of tax breaks that expired at the end of 2017 and 2018, known as tax “extenders.”

They reflect the desire of Ways and Means Committee Chairman Richard Neal (D-Mass.) to pair a renewal of the extenders with an expansion of tax credits that benefit workers and families. 

{mosads}The bills Democrats introduced Tuesday are not expected to become law in their current form, but reflect Democrats’ priorities for negotiations over fiscal-policy packages.

One of the bills, introduced by Rep. Mike Thompson (D-Calif.), would extend tax breaks that expired in 2017 and 2018, as well as tax breaks set to expire this year, through 2020. Provisions that would be extended include a host of tax breaks benefiting the renewable energy industry, the lower threshold for the medical-expense deduction and lower alcohol excise taxes.

The bill would also provide tax relief to taxpayers who survived disasters that occurred from Jan. 1, 2018 through 30 days after the enactment of the legislation.

To offset the cost of extending the expired and expiring tax breaks, the bill would have the GOP tax law’s increase in estate-tax exemption amounts expire at the end of 2022. Currently, those provisions are set to expire at the end of 2025.

Another bill, offered by Neal, would expand the earned income tax credit, the child tax credit and the child and dependent care tax credit for two years. It would also provide permanent funds for the earned income tax credit and child tax credit for Puerto Rico and other territories. 

The bill would repeal a provision in the GOP tax law that imposes a 21-percent tax on nonprofits’ transportation benefits to employees. Repeal of that provision has bipartisan support. A hearing about the provision was originally scheduled for Wednesday but was canceled, which Ways and Means Committee Democrats said was due to scheduling conflicts with House-floor proceedings.

“Unlike the Republican tax law, this substantial legislation’s primary aim is to help workers and struggling families get ahead,” Neal said in a statement. “We must seize this opportunity to combat poverty and provide real relief for folks who are barely getting by.

The Joint Committee on Taxation estimated that the bill on extenders and disaster relief would cost about $5 billion over 10 years, and that the bill expanding tax credits would cost about $102 billion over 10 years.

In addition to the tax extender and tax-credit bills, the Ways and Means Committee is also slated to consider two other pieces of legislation on Thursday. One of the bills would increase entitlement funding for child care, and the other would clarify that all tax-code provisions apply to same-sex married couples in the same way that they apply to other married couples.