Tax Foundation researcher predicts that the tax package up for House vote could end up costing $1.5 trillion over ten years

Washington, DC:- According to a Tax Foundation researcher, the bipartisan tax deal that increases the Child Tax Credit and is scheduled for a House vote this week might end up costing $1.5 trillion over the course of ten years.

The House may vote on the Tax Relief for American Families and Workers Act as soon as Tuesday.

The bill’s temporary tax measures were appropriately graded by the Joint Committee on Taxation (JCT) in accordance with their text. Garrett Watson, a senior policy analyst at the Tax Foundation, stated that “the fact that lawmakers would only be considering temporary tax policy through 2025 masks the larger long-term costs if the changes are eventually made permanent as many would like to see happen.”

In actuality, depending on how much of the underlying current law child tax credit (CTC) we include in a permanency package, it would cost anywhere from $700 billion to $1.5 trillion over a ten-year period to make the tax arrangement permanent. That would require further offsets if we want to avoid expanding the deficit, he continued, as it is far more than the gross cost of the interim provisions currently under consideration, which is approximately $80 billion.

According to a report released last week by the Committee for a Responsible Federal Budget (CRFB), the bill’s tax measures may wind up costing taxpayers $650 billion over the course of the following ten years. The CRFB estimates that “limiting excessive payments from the pandemic-era Employee Retention Credit (ERC)” would cover the $79 billion cost projection through 2025.

Not all Republicans are in favour of the tax plan and its “pay for” clause, which runs until 2025, according to a Republican congressional source who spoke with Just the News.

The source claims that many conservatives believe the “pay for” clause is a budgetary ploy and that, in order to save taxpayer money, they would like the package to do away with expensive green energy tax credits from the Biden administration that were slipped into the Inflation Reduction Act of 2022.

The CTC was increased in the package from $2,000 to $3,600 per kid. Members of the hardline House Freedom Caucus have voiced their opposition to this change, claiming that it should not apply to undocumented immigrants who file tax returns. At the moment, undocumented immigrants are able to claim the CTC for their children and submit tax returns with tax identification numbers instead of Social Security numbers.

The GOP-led House Ways and Means Committee responded to the criticism by writing on X that “all the protections to the Child Tax Credit that Republicans implemented under President Trump remain in place” and that the plan does not “open the door to new child tax credit claims by illegal immigrants.”

The new tax plan will expand the tax breaks available to illegal immigrants who file returns and claim the benefit for their children, as per the Trump administration’s tax reform. According to reports, before Trump’s tax reform, undocumented immigrants were able to claim the child tax credit without having to show their U.S. citizenship by presenting the child’s Social Security number. The children’s Social Security number was required by the Trump tax reform package in order to be eligible for the credit.

The State and Local Tax Deduction, or SALT, was capped at $10,000 under the Trump tax reform law. Both individual and joint tax returns are subject to the cap. Members of the nonpartisan SALT Caucus in Congress, the majority of whom are from states with high taxation, favour raising or doing away with the cap. Some of these legislators have sworn to vote against the bipartisan tax agreement when it comes to the House floor because it leaves the cap in place.

Rep. Nick LaLota, R-N.Y., stated on Monday, “I’m a no on the tax package that does not have adequate relief for SALT.” “I’m prepared to vote no in order to defend my constituents.”

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