The Tax Relief for American Families and Workers Act set for a House vote with a joint committee on taxation, has drawn attention due to projections of a $1.5 trillion cost over 10 years, prompting debate over its potential long-term consequences and temporary provisions.
Temporary Tax Provisions Worry Joint Committee on Taxation and Experts About Long-Term Fiscal Impact
Republican and Democratic House lawmakers have criticized the Bipartisan Tax Relief for American Families and Workers Act for its long-term economic effects. The bill’s short-term tax policies might cost $1.5 trillion over a decade, says a Tax Foundation analyst.
Garrett Watson, a Tax Foundation senior policy analyst, stressed the significance of evaluating long-term consequences if the bill modifications become permanent:
“The Joint Committee on Taxation (JCT) properly scored the bill’s temporary tax provisions as written in the bill. However, the fact that policymakers would be considering only 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,”
Additionally, the Committee for a Responsible Federal Budget (CRFB) analysis concluded that tax provisions in the bill could end up costing taxpayers $650 billion over the next decade. The “pay for” provision, which applies through 2025, has also come under criticism, with discussion about alternative strategies to save taxpayer funds, including the elimination of costly Biden-era green energy tax breaks.
Conservative House Freedom Caucus members oppose expanding the Child Tax Credit from $2,000 per kid to $3,600 for illegal immigrants who file tax returns. In prior and current tax reform bills, Child Tax Credit safeguards and their impact on illegal immigrant tax filers have been discussed.
The bipartisan SALT Caucus, mostly from high-tax states, is unhappy with the bill’s $10,000 cap on the State and Local Tax Deduction and plans to oppose it on the House floor, citing inadequate relief for SALT.