America's Talking - Tax Bill Heads to Senate, Faces Uncertain Future

Episode Date: February 4, 2024

The U.S. House of Representatives passed a bipartisan tax bill with a vote of 357-70 late Wednesday, but that bill now faces an uncertain future in the Senate. The Tax Relief for American Families and Workers Act had bipartisan support after months of behind-the-scenes deals involving both parties. Whether the Senate can get the bill passed, though, remains unclear. The Senate faces several other deadlines, including a March deadline to reauthorize the Federal Aviation Act, two looming government shutdown deadlines the same month, as well as a border bill and a potential spending bill for Israel, Taiwan and Ukraine. Meanwhile, the potential impeachment of Homeland Security Secretary could soon land in the Senate’s lap. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Greetings and welcome to America in Focus powered by the Center Square. I'm Dan McAulb, Vice President of News and Content at the Franklin News Foundation, publisher of the Center Square Newswire Service. Joining me again today is the Center Square's Washington, D.C. Bureau Chief, Casey, how are you, Casey? Doing good, Dan. How are you? I am doing well. Casey, we're recording this on Friday, February 2nd. It's Groundhogs Day.

Did you happen to see the news earlier this morning? Oh, I missed it. Educate me. Punksitone Phil. the great prognosticator did not see his shadow forecasting an early spring. You excited? I'm, you and Dan, I've never been more excited on a podcast. Does this have political implications? What does the shadow mean?

Is a Democrat or Republican victories in the White House? This is non-political, Casey. Oh, sorry. That's great about Pung Satani Phil. He has no party affiliation. He's an independent. Okay, good to know. Yes. Casey, let's get into the news this week. The U.S. House of Representatives passed a bipartisan bill with a pretty significant majority, 357 yes to 70, no, that will essentially reform some of the country's tax laws. Now it has to go to the Senate where it faces an uncertain future, but tell us a little bit about what's in the bill.

Yeah, this bill, in some sense, has been a very long time coming and in other ways came out of nowhere. So those behind the scenes, and I've, you know, been on the phone with Ways and Means Committee staff and heard about this issue. And so I know that they've been working behind the scenes, building coalitions, making deals with Democrats, provisions in parts of this bill have been, you know, through lengthy committee markups where everybody gave their input. And so when it was really finally time for this bill to be packaged together, the reason it had such broad support is because every part of it had already been signed off on by so many groups. They had a really aggressive campaign. I've been getting emails of support from, you know, pro-life groups, from family groups, from a wide, you know,

spectrum of groups. Republicans and Democrats are speaking on of it. So all in support of it. And that all speaks to a long process of building consensus and coalition. Now, the reason this came out of nowhere, is because you may not have noticed, but Congress is very gridlocked right now. And we have a government shutdown, you know, scheduled, as it seems they're on the calendar more and more of these days, but scheduled for March, right? And so there's a government shutdown coming in March. You may have heard the Senate, the Senate is locked up over this border bill, which is, you know, Trump and Biden are all weighing in on. And yet somehow this bipartisan tax bill, which does have some real changes that we can talk about, was able to sneak through the House. Now,

tax bills do have a way of getting passed when everything else is great. We saw that during the Trump administration, especially early in his year. He wasn't able to pass or do a lot of the things that he wanted to do. But that tax bill did make it through. I mean, the tax bills have extra legs, it seems often. So that's what we're seeing here. You know, we can talk about the provisions of the bill. We can talk about the difficulties that faces in the Senate.

But this bill was able to pass at a time when Congress is in total chaos, is potentially going to shut down the government again. is changing, you know, changing speakers like T-shirts, but it got through. Well, let's talk a little bit about some of the details. The bill that passed the House now in the Senate would expand the child tax credit for families. It would end some double taxation for people and businesses who are in both the U.S. and Taiwan. I mean, why does it matter, I guess? Help us understand why either passage of this bill or not.

non-passage of this bill matters. Yeah, I mean, you mentioned some of those provisions. I'll say a couple that are really going to probably be most relevant to our listeners. You see an expansion of the child tax credit. Okay, so if you have children, if you benefit from the child tax credit, especially if you have a big family, you're going to see better returns for your child tax credit. The child tax credit will also be pegged to inflation, right, which is really significant. So the child tax credit is going to, if this bill becomes law,

and this provision's not taken out is going to steadily increase in perpetuity, which is, you know, we know, and we've talked a lot on this program about how inflation has hit families hard. Prices have risen, you know, almost 18% since Biden took office. And so some of these, you know, line item tax credits are, you know, losing their value because of inflation. So it's going to be pegged to inflation. We're going to see an increase in the child tax credit that's going to, you know, have definitely impact families in a significant way. So that's one. You talked about the competitors of China, you know, business writeoffs.

Here's another one. The employee retention tax credit. This is more of a taxpayer, you know, our taxpayer's money being spent well, is the money being stewarded well. This tax retention credit that was really to help, you know, employees keep their jobs. It was kind of a especially championed during the COVID era when things were difficult. It has become really a total disaster. And it's been abused.

There's so much fraud. There's so much waste that the IRS actually last fall paused the entire program. Because anecdotally, they had agents who were saying as much as 95% of the applications for this tax credit, which is $70 billion program. It's not a small program. that 95, as much as 95% of the applications were totally fraudulent or incomplete or just terrible, right? So the program was just being totally abused. I think that was encouraged because we know we've had some really good reporting at the Sooners Square.com about how these COVID-era programs had billions and billions and billions of dollars that were stolen from them. The COVID-era welfare, if you want to call it that, which I think people had good intentions.

It had bipartisan support. But people took advantage of it. And that money is really gone. I mean, there's been a little bit done to get it back. But there's billions of billions of dollars that went to nefarious actors and they're going to get away with it. And I think the word is out on that. And so we're seeing the same, seeing that happen here with this employee tax credit. And so this bill would eliminate that tax credit, that program that has been so abused.

So there, you know, there have been critics of this program. And we can talk about that. But those are some of the big provisions that we've seen. Actually, Casey, we are out of time. Listeners can keep up with this tax bill's fate in the Senate at the center square.com for Casey Harper. I'm Dan McAelam. Thank you for listening. Please subscribe.