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jason smith
Tlaib Is a 'No' on Tax Breaks for Rich to Get 'Crumbs' for the Poorest
"This deal falls short, and will only reach a fraction of the most vulnerable," said the congresswoman of a tax deal set to be voted on Wednesday.
Jan 31, 2024
U.S. Rep. Rashida Tlaib is calling on her fellow Democrats to "stay at the table and demand a better deal for our children" instead of supporting the Tax Relief for American Families and Workers Act, a bill that pairs a partial expansion of the child tax credit with major tax breaks for corporations and the wealthy, which was expected to reach the House floor for a vote Wednesday evening.
Tlaib (D-Mich.) echoed the concerns of Rep. Rosa DeLauro (D-Conn.), a longtime champion of an expanded child tax credit (CTC), saying Democrats and Republicans have negotiated a bill that "gives billions of dollars in tax breaks to the rich, while leaving behind millions of children living in poverty."
A number of progressive groups have joined Republicans in calling for the passage of the bill (H.R. 7024), which was negotiated by Rep. Jason Smith (R-Mo.) and Sen. Ron Wyden (D-Ore.), but Tlaib and DeLauro have each analyzed the legislation and found that while it offers an average of $57,530 in tax breaks for the richest 0.1% of Americans, the poorest 20% of households would receive just $60 in tax credits.
"Our families deserve so much better than a bill that trades massive tax breaks for the richest Americans for crumbs for a fraction of the poorest children in our country. In the first year, the richest 120,000 households would get a larger share of the tax benefits than the bottom 88 million families," said Tlaib.
Like DeLauro, Tlaib said Democrats should not accept the CTC provisions in H.R. 7024 after seeing the transformative difference the American Rescue Plan (ARP) made in U.S. poverty rates in 2021.
Childhood poverty was slashed by 30% by the enhanced CTC included in the ARP, reaching 61 million children and allowing their parents and guardians to pay for groceries, childcare, and other essentials.
"This deal falls short, and will only reach a fraction of the most vulnerable," said Tlaib.
With Republicans insisting on minimum income and work requirements for the CTC, the provision in H.R. 7024 leaves out the poorest families while ensuring households that earn up to $400,000 per year get a $2,000 credit.
Meanwhile, said Tlaib, "corporations who are already dodging paying their fair share of taxes" will benefit from "another handout" if the legislation is passed.
"For example, Meta—a company making tens of billions in profits—would see its effective tax rate drop from 25% to -2% under this bill," said the congresswoman. "Working families in my district should never be paying higher taxes than the richest companies on Earth. I cannot support a bill that deepens wealth inequality and economic injustice to benefit the richest Americans and corporations."
Tlaib called on Congress to pass the End Child Poverty Act, which would implement a "universal child benefit" of $428 per child, per month to all families "so that nobody is left behind."
"This universal child benefit proposal would dramatically simplify our nation's child benefit system and provide financial security for all families when they have a child," said Matt Bruenig, founder of the People’s Policy Project, last year when Tlaib introduced the legislation.
Bruenig's group found that Tlaib's proposal would cut child poverty by 61%, the deepest child poverty by 93%, and overall poverty rates in the U.S. by 26%.
"We need real solutions," said Tlaib on Wednesday, "not more tax breaks for the rich."
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DeLauro Pours Cold Water on Child Credit Boost in Exchange for Corporate Tax Giveaway
"At a time when a majority of American voters believe tax on big corporations should be increased, there is no reason we should be providing corporations a tax cut while only giving families pennies," said the lawmaker.
Jan 30, 2024
Some economic justice groups this week are pushing for the passage of a $78 billion bipartisan tax package that includes an expansion of the child tax credit—but one lawmaker who has made the credit one of her signature issues for years said Monday that the legislation does not go far enough to support families in need, especially considering the corporate tax breaks it includes.
As U.S. House Speaker Mike Johnson (R-La.) said the bill is expected to come to the House floor this week under "suspension of the rules," an expedited maneuver requiring the approval of two-thirds of members for passage, U.S. Rep. Rosa DeLauro (D-Conn.) said the bill "fails on equity" and leaves out too many struggling American families.
DeLauro released a fact sheet showing how the bill, negotiated by Rep. Jason Smith (R-Mo.) and Sen. Ron Wyden (D-Ore.), "falls far short of comparing to the gains made under the American Rescue Plan (ARP)," which in 2021 helped slash childhood poverty by about 30% with its inclusion of an enhanced child tax credit (CTC).
With Republicans insisting on work and minimum income requirements for the version of the CTC included in the tax package—to "safeguard" against undocumented immigrants and "ineligible persons" benefiting from the bill, according to the House Ways and Means Committee—"families with little-to-no income are left behind from the full child tax credit, while allowing a single parent making $200,000 or a married couple making $400,000 to receive the full $2,000 credit," notes DeLauro's fact sheet.
The ARP included all but the highest earners in the enhanced CTC, which increased the maximum credit amount to $3,000-$3,600 per child depending on the child's age and issued half of the credit on a monthly basis, enabling families to use the money for everyday necessities.
Falling short of the credit amount included in the ARP, the Wyden-Smith plan would afford families a maximum of $2,100 per child and would not provide payments to families on a monthly basis.
The tax deal is estimated to lift "up to 400,000 kids" out of poverty, said DeLauro, while "93% of kids in the lowest quintile (the poorest 1/5th of children in the country) will continue to be left behind—meaning they will not receive the full credit."
Last week DeLauro called on her fellow Democrats to "fight to ensure our families aren't sold out for profits" and told The Connecticut Mirror the bill has "serious room for improvement."
While falling short on providing economic support for families paying for groceries, childcare, healthcare, and other essentials, the Wyden-Smith deal "locks in $600 billion in tax cuts for businesses," according to Smith.
The GOP aims to make those cuts permanent, making the three-year cost "four times higher than the child tax credit," DeLauro noted.
"This is not parity," said the congresswoman, adding that a research and development tax credit for corporations will be made retroactive "under the guise of incentivizing R&D."
"It is virtually impossible to incentivize action for anything retroactively," said DeLauro. "While the CTC phases-in, corporations will get their tax cuts on the first dollar. Families will not be getting any additional child tax credit retroactively to 2022, like the corporations are."
The tax deal "delivers huge tax cuts for giant corporations while denying middle-class families the economic security they had under the expanded, monthly child tax credit," said DeLauro. "It also leaves the poorest families behind because of a policy choice. At a time when a majority of American voters believe tax on big corporations should be increased, there is no reason we should be providing corporations a tax cut while only giving families pennies."
The Pew Research Center found last year that 61% of Americans feel corporations don't pay their fair share. Nearly two-thirds said tax rates on large corporations should be raised; 39% said by "a lot," while 26% said by "a little" and just 14% said they should be lowered.
Some of DeLauro's colleagues have suggested any expansion of the CTC should be passed, with Sen. Richard Blumenthal (D-Conn.) tellingThe Mirror he was "less than ecstatic" that the credit is not completely expanded but that he would "rather see this provision enacted than none at all."
Another Connecticut Democrat, Sen. Chris Murphy, said he would consult "the mother of the child tax credit"—DeLauro.
"I'm going to continue to work to improve this legislation before it's considered on the House floor because I believe that families and children need a strong child tax credit," DeLauro told the outlet. "I'm opposed to this bill in its current form. Corporations get everything they asked for and children got pennies."
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Lawmakers Reach Deal to Expand Child Tax Credit—In Exchange for Corporate Tax Cuts
"Child poverty is a problem. Corporations paying too much in taxes is not," said one analyst.
Jan 16, 2024
A bipartisan pair of congressional negotiators announced a compromise deal Tuesday that would modestly expand the child tax credit for three years—potentially benefiting millions of kids in low-income families—in exchange for reviving Trump-era corporate tax cuts favored by Republican lawmakers.
The $80 billion tax framework unveiled by Senate Finance Committee Chair Ron Wyden (D-Ore.) and House Ways and Means Committee Chair Jason Smith (R-Mo.) after months of negotiations is seen as a longshot to pass given Republican control of the lower chamber and likely GOP hesitance to deliver a legislative win for President Joe Biden in an election year.
Republicans
unanimously opposed the American Rescue Plan, Democratic legislation that implemented a historic expansion of the child tax credit (CTC)—briefly pushing the U.S. child poverty rate to a record low. The CTC enhancement lapsed at the end of 2021 thanks to opposition from the GOP and Sen. Joe Manchin (D-W.Va.), causing child poverty to shoot back up in 2022.
While the Wyden-Smith framework would not go nearly as far as the previous CTC expansion, analysts say it would still deliver significant benefits to children in low-income families.
"In the first year, more than 80% of the roughly 19 million children under 17 in families with low incomes who don't now get the full credit would benefit—about 16 million children," the Center on Budget and Policy Priorities said Tuesday, estimating that the proposal would lift as many as 400,000 kids out of poverty in year one while alleviating poverty for 3 million more.
"These poverty-reducing effects would increase over time," the think tank added. "When the proposal is fully in effect in 2025, it would lift some half a million or more children above the poverty line and make about 5 million more less poor."
The new proposal would—like the current CTC and unlike the expansion approved in 2021—exclude the very poorest families by design, denying benefits to those with less than $2,500 in annual income. The Wyden-Smith proposal would also not bring back the monthly payments that eligible families received under the 2021 CTC expansion.
The maximum credit of $2,000 per child would be indexed to inflation under the new framework.
Ailen Arreaza, executive director of the advocacy group ParentsTogether Action, said in a statement that while the Wyden-Smith changes would be an improvement over the current CTC, "they do not go far enough."
"The 2021 expansion of the child tax credit was a game-changing policy that essentially cut child poverty in half," said Arreaza. "When Republicans refused to support its extension at the end of 2021, child poverty surged again. We have a proven tool that works almost immediately to ensure kids have enough food to eat and a roof over their heads—it's long past time we use it."
"I'm disgusted by those who saw the obvious need to extend those benefits as an opportunity to extract tax cuts for corporations."
Observers lamented that the only way Wyden and Smith were able to reach a deal with even limited benefits for children in low-income families was to pair them with tax breaks for wealthy corporations.
"Child poverty is a problem. Corporations paying too much in taxes is not," said Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy. "Unfortunately, many members of Congress have refused to direct resources to help children in poverty unless an equal amount of resources is simultaneously directed towards corporate tax cuts."
According to Wyden's office, the new proposal would allow businesses "of all sizes" to "immediately deduct the cost of their U.S.-based [research and development] investments instead of over five years."
The framework, which still must be converted into legislative text, would also provide "continued flexibility for businesses forced to borrow at higher interest rates to meet their payroll obligations and expand their operations," a summary states.
"As arcane as this sounds," Wamhoff said in response to the provision, "it ultimately will benefit the private equity industry and its practice of acquiring corporations and loading them up with debt, a technique that has led to the collapse of Toys R Us, Payless, and other well-established companies."
Erica Payne, founder and president of the Patriotic Millionaires, said in a statement Tuesday that the enhanced CTC is "an undeniable good in this new deal."
"At the same time, I'm disgusted by those who saw the obvious need to extend those benefits as an opportunity to extract tax cuts for corporations, who clearly didn't need them as they pulled in record profits and artificially pumped up inflation. There was no need for horse trading on the CTC," said Payne. "Congratulations to the members of Congress who have worked hard to extend and enhance the CTC; we hope to see it become law. Shame on those who exploit political moments to shower their ultrarich corporate donors with unnecessary tax breaks."
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